Expropriation Act threatens property-backed lending and SA housing market - IRR's Anlu Keeve

The Expropriation Act, recently enacted by President Cyril Ramaphosa, has spark retaliatory measures by the United States. Domestically, the Institute for Race Relations (IRR) warns of disruptions in the banking sector's practice of using property as collateral for home loans. Anlu Keeve told Biznews in an interview that the loss of stable property value as collateral could have a ripple effect throughout the economy. Higher credit risks for financial institutions may lead banks to tighten lending criteria, raise interest rates, and limit credit availability. Keeve also highlights the risks of increased investor nervousness and potential capital flight. Addressing criticisms that the IRR’s warnings are alarmist or fear mongering, Keeve points to historical precedents, citing Zimbabwe and Venezuela as examples of the economic chaos that can follow expropriation measures. "In Zimbabwe," she adds, "houses in Harare weren’t confiscated, but their value still collapsed."