Is property a good investment in the current economic climate?

Abstract

Investment in a broad sense is much like saving, but with the key difference of there being risk involved in investment. One is often lead to believe that when it comes to investment the higher the risk, the higher the potential reward. This statement might be the reason why most prefer to play it safe and rather save money at almost no risk than taking a chance with investment, which in some instances seems like a gamble, and possibly lose one's hard earned money. Economics to most are an ambiguous science and even those who make a living from it sometimes struggle to grasp or fully understand its inner workings and mechanisms, making it difficult to predict. Bearing this in mind, how does an average person with no extensive knowledge in this field make an informed decision towards making a successful investment? The most prominent question being, what to invest in? The last couple of years property performed exceptionally well in South Africa with constant and steady growth rates suggesting that one can almost not go wrong with property. This caused a ‘buzz’ around the property investment sector leading ordinary people to believe that property is the way to go for the future. Some were successful and some failed miserably. This leads to the question: can property reliably be said to be the best overall investment, especially when considering the current economic and political conditions in South Africa?