Retirement savings: Has Covid-19 burst the property bubble? The Wall Street Journal

Like many South Africans, I have watched my investments that were tied up in retirement savings vehicles offered by Sanlam, Old Mutual and other large institutions shrink instead of grow. The dismal returns have been linked as much to excessive costs in a financial sector that has become a feeding pit for intermediaries as they have to the choice of underlying, mostly South African, assets. And, tinkering with shares has never been productive, so I've pinned my hopes on property delivering an income for me when I retire. But the Covid-19 fiasco has underscored that property, when it is illiquid, is utterly useless and can be a significant financial drain if it's buy-to-let and the tenants can't pay. Right now, for example, it's difficult to buy and sell property for practical reasons amid a shutdown that has left most businesses standing still. And, then, with recession still building, there are warnings from SA property economists that prices could easily plummet at least 25% amid excess housing stock – including short-term holiday rentals that will be returned to the market now that no-one is travelling far. The property pain has been felt across the world. The Wall Street Journal's personal finance experts point out that the woes in the property market could easily last into the next decade in the US – a reminder that property fans should be working out how to diversify into other assets for the long term. – Jackie Cameron