US President Donald Trump’s decision to impose a 30% tariff on all South African imports from August is expected to weigh on the economy, hit major exporters, and put pressure on the property market in the short term.
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US President Donald Trump’s decision to impose a 30% tariff on all South African imports from August is expected to weigh on the economy, hit major exporters, and put pressure on the property market in the short term.
However, the shift in global trade dynamics could support South Africa’s longer-term diversification efforts and bring new activity into the real estate sector.
President Cyril Ramaphosa said the 30% tariff is based on “a particular interpretation of the balance of trade between South Africa and the United States” and that government remains engaged in “ongoing negotiations” to secure sector-specific reductions.
Chas Everitt International CEO Berry Everitt says the US tariff will impact South African competitiveness, which is likely to cause a drop in demand for goods that will have repercussions not only for the South African exporting companies and their employees but also for the broader economy and the real estate market.
The US is South Africa’s second-largest bilateral trading partner, with $14.7 billion in exports last year and $5.8 billion in imports, a trade deficit of $8.8 billion for the US, said Everitt.
“We do expect the real estate sector to feel the effects of the US tariff decision for at least a few months while businesses adapt. There could be job losses in the export-driven industries, and the banks are likely to be more cautious about approving home loans,” Everitt said. “This will slow demand for both residential and commercial properties and cause many investors and developers to press pause on new projects,” he added.
Denese Zaslansky, CEO of the FIRZT Realty Group, said the immediate effects of the US decision will be negative. “The agricultural, automotive and mining sectors will be the most severely affected by the new tariffs and may well experience some job losses unless the SA government can succeed in its ongoing negotiations.”
An economic slowdown and employment uncertainty would demand for both residential and commercial properties,” said Zaslansky.
Zaslansky added that “an increasing number of companies are, for example, achieving stronger trade relationships within Africa thanks to the African Continent Free Trade Agreement and with other members of both the G20 and the Commonwealth, as well as the members of BRICS+. This bodes well for job retention and even creation in due course, and for housing demand”.
International buyers are increasingly looking to the local property market. Zaslansky said that, despite the US tariffs, South Africa's relative stability and its rising exposure in other countries are also attracting increasing numbers of foreign investors to the local property market, who are buying up rental home portfolios, as well as luxury properties for their own use.
“They are expecting rental demand and returns to strengthen due to both a shortage of supply currently and to rising demand among those not ready or financially able to buy their own homes yet. In addition, there are many foreigners working on contract in South Africa for international companies who prefer to rent,” she said.
Rory O’Hagan, managing principal of Chas Everitt Sandton, Waterfall and Bedfordview, noted at the end of June that demand for both office space and residential rentals near major commercial hubs was already rising.
“A rising number of multinational companies have recently made strategic investments in South Africa, and others are responding now to the government’s new frameworks for public-private partnerships, especially in infrastructure development,” O’Hagan said.
In addition, Zaslansky said, “skilled South Africans are increasingly being employed by international companies without having to leave the country, thanks to improved technologies and the growth of remote working. And this means less emigration, which is definitely also helping to stabilise our real estate market.”