Proposed US tariffs on South African goods could have far-reaching effects, with economists and property experts warning of potential knock-on impacts on the local housing market.
This comes as the United States considers implementing a 30% tariff on select South African exports, a move that has raised concerns across multiple sectors – from agriculture to mining and manufacturing. While the immediate effects may be felt by exporters, the ripple effect could dampen consumer confidence, weaken the rand, and place further strain on already-tight household budgets.
Antonie Goosen, principal and founder of Meridian Realty, says that although property is not directly tied to international trade, the industry is highly sensitive to broader economic pressures.
“The property market doesn’t operate in a vacuum,” Goosen explains. “If the US goes ahead with this tariff, it could affect key export sectors like steel, aluminium, and citrus – and the subsequent slowdown in these industries could lead to job losses or reduced earnings, especially in rural and agricultural areas.”
He adds that reduced export revenues could hurt the rand, leading to a weaker currency. “A weaker rand pushes up inflation by increasing the cost of imports, including fuel. This in turn affects household budgets – and when consumers feel the pinch, they’re less likely to invest in property or upgrade their homes.”
Knock-on effects on interest rates
Goosen says that if inflation rises due to tariff-related economic pressure, the South African Reserve Bank may be forced to keep interest rates higher for longer.
“This would affect bond repayments and borrowing ability, especially among first-time buyers who are highly sensitive to rate movements,” he explains. “It could also delay a potential recovery in middle-income property markets.”
Areas most at risk
Certain regions that rely heavily on export industries – particularly parts of the Western Cape, Eastern Cape and Limpopo – may see downward pressure on housing demand if tariffs lead to cutbacks or retrenchments.
“In towns that rely on farming or mining exports, any blow to those sectors tends to quickly show up in the property market,” says Goosen. “Reduced income in a community results in fewer buyers and more distressed sellers, which can drive prices down.”
Opportunities for investors
However, Goosen says that savvy property investors could also find opportunities in this period. “Economic uncertainty can lead to softer asking prices, and cash buyers in particular may find good deals in areas where others are hesitant,” he says.
He cautions, however, that investors must consider long-term fundamentals and not just short-term price movements. “Look at the area’s resilience, rental demand, and infrastructure investment before jumping at a deal.”
While the full impact of the US’s proposed 30% tariff on South African goods remains to be seen, Goosen urges buyers and sellers to stay informed and realistic.
“Global politics and trade can have local consequences. Property owners and investors would be wise to pay attention to these developments, especially in a high-interest-rate and low-growth environment,” he concludes.
