The United States’ announcement this week of a sweeping 30% tariff on all South African goods – effective from 1 August – could deal a blow to South Africa’s economy, with potential ripple effects for the local property market.
However, experts say it may also open a window of opportunity for savvy investors.
That’s according to Berry Everitt, CEO of the Chas Everitt International Property Group, who says the new tariffs are likely to dampen demand for South African exports in the US due to rising prices, affecting local industries and jobs – and by extension, the real estate sector.
“The new tariff level will make SA goods more expensive – and thus less attractive – for US consumers to buy, and so is likely to cause a drop in demand 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,” he says.
The US is South Africa’s second-largest trading partner. In 2024, total goods trade between the two nations amounted to $20.5 billion, with SA enjoying a trade surplus of $8.8 billion – a figure US president Donald Trump recently called “untenable” in a letter to president Cyril Ramaphosa.
Trump’s warning also came with a threat: any retaliatory SA tariffs on US goods would result in further duties being imposed by the US, added on top of the initial 30%.
“The new tariff level threatens key export sectors, notably automotive, agriculture and mining, all of which are major employers, and initial projections are that this move will immediately reduce South Africa’s economic growth by around 0.3 percentage points,” Everitt said.
The decision has also led to a weakening of the Rand, increasing the cost of imports like fuel, which could drive inflation higher and reduce the likelihood of interest rate cuts in the near term.
Despite the challenges, Everitt points out that local exporters are already diversifying, turning to markets outside the US.
Regional trade agreements such as the African Continental Free Trade Area (AfCFTA), and growing ties through BRICS+, are opening new avenues – particularly in Asia and the Middle East.
China, for example, recently dropped tariffs on imports from 53 African countries with which it maintains diplomatic relations – including South Africa – making local goods more competitive in the Chinese market.
Still, the real estate sector is expected to feel the pressure in the short term.
“We do expect the real estate sector to feel the effects of the US tariff decision for at least a few months while SA 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.”
That said, Everitt believes the slowdown could present opportunities for buyers who are confident in South Africa’s longer-term prospects.
“The other side of this coin, though, is that property price growth will stabilise for a period and create opportunities for those who have a positive view of SA’s longer-term future, as we have, to negotiate with sellers and buy at prices that will prove to be highly advantageous.”
He also suggests real estate could become a more appealing asset class as global markets react to the tariff uncertainty.
“We believe many buyers will soon find the real estate market one of the better places to invest as stock markets around the world become more volatile in response to the shifting US tariff scenario.”
“As a member of Leading Real Estate Companies of the World, we have seen how similar scenarios play out in other countries, and are able to provide sound advice to both buyers and investors seeking to maximise the opportunities now developing in the SA market.”
Meanwhile, South Africa’s Department of Trade and Industry is working to negotiate exemptions or revised terms ahead of the looming 1 August deadline.
