Although property owners have demonstrated resilience in managing expenses, administered prices continue to rise at rates well above headline inflation.
At a time when many economies had begun to anticipate a more benign interest-rate environment, the resurgence of geopolitical tensions has rekindled concerns about inflation.
According to Emeritus Professor François Viruly, a property economist and chief economist at Datazone, South Africa faces a primary risk that extends beyond the immediate consequences of rising energy and transport expenses.
He notes that the potential impact of heightened inflation expectations on monetary policy and long-term borrowing costs remains a significant concern for the country.
He says listed property securities compete directly with government bonds for investor capital, making movements in bond yields a critical determinant of sector valuations.
