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BUSINESS NEWS - It’s hard to imagine that the serene towns of Mossel Bay, George, Knysna, and Plettenberg Bay - known for their coastal charm and rising property values - could be caught in the crosswinds of global trade tensions. 

But with the United States proposing a sweeping 30% tariff on South African exports, the ripple effects, especially in the automotive and agricultural sectors, may soon reach the shores of the Garden Route. 

Reduced U.S. export demand could lead to layoffs, shrinking disposable incomes, and weakening investor confidence. And when confidence dips, so does property activity.

Economic shockwaves: The stats behind the sentiment

• Vehicle exports to the U.S. dropped by 73% in Q1 2025, followed by 80% and 85% declines in April and May, respectively.
• Citrus exports worth R1.8 billion annually are now under threat.
• Econometric models predict a $1.4–$2.3 billion annual loss in exports to the U.S..
• The South African rand has immediately weakened to levels of R17.96 to the dollar, reflecting investor unease, although it has recently recovered slightly.

These figures paint a sobering picture: industries that fuel employment and consumer confidence are under pressure and pressures in those sectors will inevitably reflect in others. 

Western Cape & Garden Route: Property market snapshot
The Western Cape’s property market, known for its resilience and appeal to domestic migrants and foreign investors, is not immune. Mossel Bay and George - often seen as practical alternatives to Cape Town with solid infrastructure and expanding middle-income developments - may experience a cooling effect. 

Declining consumer confidence could result in lower absorption rates for new units and stalled construction projects.

Knysna and Plettenberg Bay, with their premium coastal allure, may suffer from tightened discretionary spending. 

These leisure-driven markets thrive on semi-retired buyers, holiday homeowners, and high-net-worth individuals. If the broader economy tightens, such purchases may be deferred, leaving estate agents to grapple with longer listing periods and more price-sensitive negotiations.

Let’s zoom in on the local market to understand what’s at stake:

Western Cape Property Trends (2025 YTD)

Garden Route Property Trends (2025 YTD)

Source: Property24, Lightstone, Daily Investor

Developers: Bracing for headwinds
With construction costs rising and foreign investment potentially cooling, developers may face delayed launches due to cautious buyer sentiment, and reduced off-plan sales, especially in lifestyle estates. In addition, exchange rate volatility may impact imported materials. 

In George and Mossel Bay, where middle-income developments are expanding, even a modest dip in demand could stall progress. Medium-term consequences may include consolidation of smaller firms or shelving of speculative developments.

Estate Agents: Navigating uncertainty
Estate agents in the region will need to recalibrate strategies. Agents in Knysna and Plettenberg Bay - where luxury and leisure drive sales - may need to reposition listings to appeal to international buyers unaffected by local economic shifts, while agents serving Mossel Bay and George may turn towards long-term rentals or distressed property sales. 

With tighter competition and potentially fewer buyers in play, market positioning, pricing acumen, and client education will become crucial. In particular, agents will have to educate sellers on realistic pricing in a sentiment-driven market.

Outlook: Fragile but flexible
Despite the turbulence, the Garden Route’s appeal remains strong. The region’s natural beauty, infrastructure, and lifestyle continue to attract semigrants and retirees. But the next 6–18 months will test the market’s resilience.

If you would like expert guidance through the property landscape, talk to someone who speaks property, fluently. Call Jaco Lötter on 044 – 220 0240 for a free first consultation and excellent coffee.

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