It is expected that the property market in South Africa will be weaker in 2023 due to a global economic slowdown, rising interest rates, and major electricity supply problems. The industrial property market is expected to remain the relative outperformer, but a slower year in that property class is anticipated. The residential rental market may ‘level out’, and a slower year for residential development is expected.
The Western Cape is expected to be the outperforming regional property market due to years of relatively sound regional management and superior attraction and retention of skilled labor. With a slower economic growth rate in 2023, the All Property Vacancy Rate is expected to rise. FNB projects Real Gross Domestic Product to grow by a slower 1.2% in 2023, following an estimated 2.3% in 2022. Interest rates are expected to reach their peak with prime rate reaching 11%. However, the full cooling effect of rate hiking takes some time to feed into the economic numbers.