Whatshot
Property Talk: The Winners and Losers Of The Unrests
Property Talk: The Winners and Losers Of The Unrests
Date: 2021-07-13
South Africans are resilient. One week we are in the closest thing to an all-out civil war most of us have ever experienced to business as usual the next. Events, such as we experienced recently, with lawlessness and the complete absence of policing services in KZN have short-term and long-term consequences.
There will be some relative winners and losers once the immediate costs are calculated. The physical damage to businesses and property is one evident aspect but there will also be hidden costs that are not readily quantifiable and which will have a longer-term impact on our economy and markets.
The security industry will be the immediate winner with highly trained and heavily armed tactical teams offering welcome services to business owners and residential areas. Firearm sales will skyrocket benefitting those suppliers and retailers.
A spike in emigration is predictable as will be a semi-gration from KZN to other areas such as the Western Cape that are perceived as being more secure and better managed. The sad reality with emigration is the loss of human capital to the country and typically includes highly productive and qualified people.
Anybody contemplating emigration needed no more reason than the orchestrated insurrection to make them pull the trigger. For the vast majority of solid law-abiding South Africans, the choice to emigrate is not economically feasible.
This reality means that we have a strong incentive to work things out and do whatever it takes to build the South Africa we want to live in. The exceptional ability of local communities across KZN to mobilize themselves into an effective defensive force in the face of an imminent and real threat is remarkable and provides hope that we will work this out.
From a property perspective, there will be a further migration away from open suburbs and residential areas nearby and with exposure to informal settlements to gated communities and suburbs perceived as being more secure.
Market pricing will reflect this demand shift. Smart investors will look for undervalued opportunities within geographically secure areas that benefit from the security investment by neighbouring estates or suburbs. In our immediate area, smaller estates such as Port Zimbali Estate and Hilltop Estate benefit from the security investment made by Zimbali Coastal Resort.
Ballito suburbs benefit by having the ocean on one side and the main access points into the town easier to control. Residential areas to the west of the N2 will be more exposed and the market will judge them accordingly. The flood of enquiries on rental opportunities within secure gated communities is the beginning of this demand shift and will be followed by purchase enquiries.
Large established and highly secured estates such as Zimbali and Simbithi are expected to be the relative winners. New developments will still have to prove their security status to the market. Outlying estates or suburbs, which are geographically isolated will be the immediate losers as security concerns shift market demand away from them.
As before, but with a heightened level of consciousness, security concerns will remain the top of mind consideration for property investors.

