The South African property market continues to distinguish itself from other sectors as an investment magnet, with the sector currently valued at almost R 6 trillion. Despite this impressive performance, South Africa lost ground in the 2016 JLL Global Real Estate Transparency Index – but should investors really be concerned?
SA – the only transparent market in Africa
South Africa is the only country in Sub-Saharan Africa to achieve a ‘Transparent’ rating on the 2016 index, mostly thanks to the listed property sector which represents mainly commercial properties. The country ranks 25th in the world for real estate transparency, reflecting the professionalism of our local property professionals.
However, the past few years have seen South Africa slip several places on the index – giving the local property sector a good reason to evaluate its practices and set higher transparency goals in future as it seeks to keep up with international competitors.
In order to maintain its position as the most transparent market in Africa, South Africa will also have to stay several steps ahead of countries such as Botswana (the most improved Sub-Saharan market), as well as Kenya, Zambia and Mauritius. These countries are currently classified as semi-transparent but are making steady upward progress in the rankings.
Keeping up with our main competitors
South Africa’s superior ranking amongst African nations, as well as the commendable improvements in the property markets of our neighbouring countries, will give many investors reason to be optimistic.
While our property sector remains competitive by regional standards, it’s important that South African property professionals remain vigilant. Maintaining international standards is especially important because our property sector competes for investors with nations at the very top of the transparency index.
The UK, Australia, Canada and the USA took the four top positions in 2016, with their local property sectors providing investors with the best access to information, ease of sale and purchase and solid regulatory environments.
Discerning investors demand quality information
In the age of big data, access to information is a factor that distinguishes the top nations on the JLL index – and South Africa may be wise to follow their lead.
The most transparent markets feature property information at the national, provincial, city, and even neighbourhood level, providing investors with a clear picture of the property landscape in areas where they wish to invest. A similar level of data could allow South Africa to rise even higher in the global property rankings.
What South Africa’s ranking means for the future
With many African nations raising the standard of their property sectors and a general increase in the standards applied by the world’s market-leaders, South Africa’s future competitiveness will require a superior level of transparency in all dealings, as well as access to as much market information as possible.
2016 is a year that presents a unique opportunity to the SA property sector: if standards are maintained and improved, the sector will be well-positioned to increase its popularity with international and regional investors.