Johannesburg Homes market comment

Ten years of no growth has damaged faith in property says Ronald Ennik

“Johannesburg/Sandton is sitting on a pent-up tide of would-be home buying – particularly among the millennials. And it is simply waiting to roll out.”

This is the view of Ronald Ennik, CEO and founder of Ennik Estates, a niche marketer of upper end homes north of the city CBD.

“Since the financial crisis of 2008, residential property has performed very poorly, not quite keeping up with inflation for 10 years. Taking growth and inflation rates into account, the market has, in fact, flat-lined over the longest period in my 35 year career.

“Ten years is a long time, even in residential property. Memories of how vital an asset class it is in any investment portfolio have faded. The old days of riding the three-year cycles cleverly (with astute gearing) have long gone,” says Ennik.

Dinner table talk

 “Against this background, dinner table talk on residential property these days has hardly been invigorating. Most millennials, now economically active in their 30s, had never before experienced the benefits of good property investment.

“Today they account for about 50 per cent of home purchases in Johannesburg/Sandton. And they will be the key driving force when the market does strengthen its turn around,” adds Ennik.

“Millennials who have not yet taken the plunge are still seeking to be convinced that there will be a likely return on their investment.

“Political sentiment has now improved by a quantum leap, and economic forecasts are showing steadily increasing optimism.

“So why has the property market not immediately followed suit?” asks Ennik.

A paradigm shift

“It will take a little while (perhaps a paradigm shift) for faith to be restored. That is why the turnaround is starting slowly. It will gather momentum – particularly after there is clarity on the property expropriation front. And there will be clarity.

“Meanwhile, the average number of buyers currently responding to show days and portal advertising has doubled since last year. This should slowly – or, possibly, not too slowly – translate into transactions,” Ennik concludes.

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For further information contact: Ronald Ennik – 011 788 0688; 083 273 3707