WHAT THE PROPERTY MARKET HOPES TO HEAR IN THE NATIONAL BUDGET SPEECH
Finance Minister Tito Mboweni will make his debut National Budget speech in Parliament today. According to Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett, the National Budget speech has a profound impact on the property market as it sets the scene for what can be expected for our economy in the year ahead.
“Considering how closely linked the property market is to the state of the economy, a budget that promises positive strides towards economic growth and increases consumer confidence and spending is what property investors and homeowners alike should be hoping for,” Goslett explains.
To be more specific, Neville Brits, Broker/Owner of RE/MAX Dazzle elaborates on exactly what he as a Broker/Owner would like to hear announced in this year’s National Budget Speech: “Firstly, I would like to see a clear policy statement on how the government intends on dealing with its state-owned enterprises, such as SAA and the SABC. Not only are they a massive tax burden on the country’s revenue, but their poor performance has also had a negative effect on the Rand which weakened considerably in the past few days following the announcement that Eskom is technically insolvent.”
“Secondly, I am hoping for a minimal tax increase for middle income households. A decrease is probably too much to ask for, because our government requires these finances at this point. However, the home buying power is diminished if the middle- and high-income brackets are taxed exorbitantly, and this has a negative effect on the housing market in general. Hopefully they will also increase the threshold for transfer duty exemption from R900,000 to R1 million, as this will also help middle-income households afford the additional costs involved in purchasing property,” Brits adds.
Puxton Mokoena, a homeowner working through RE/MAX Dazzle’s Gerrie Alberts, seconds Brits wishes in this regard. “I would wish for two things in the national budget speech. The first would be a reduction in transfer duties, as this affects people’s ability to purchase property. I would like to see this increase to the two million mark, as I am sure this will allow us to see more sales. Secondly, I would like to hear another reduction in the time it takes for government and local municipalities to rezone land for development. If they reduce this time, there will be more properties on the market and developers would save money on holding costs. Reducing this waiting period would help to rectify our current housing deficit problem,” Mokoena explains from a homeowner’s perspective.
Beyond solving our housing problem, Brits hopes that government will also implement policies to help lower our unemployment rate. “In this year’s budget speech, I hope that there are no company tax increases, but rather tax incentives for small to medium enterprises when they create additional employment opportunities. This will help alleviate our unemployment problem to assist in this area of the economy,” says Brits.
Similarly, Rudi Botha, CEO of SA’s leading bond originator BetterBond, says along with mining, agriculture and tourism, the repair and development of SA’s physical and communications infrastructure and the creation of new housing has the potential to attract both foreign and local investment and create many thousands of new permanent jobs a year.
“Consequently, BetterBond will be looking for confirmation of the medium-term budget amounts allocated to the expanded public works programme in the Budget to be presented this week, as well as the amounts to be allocated to municipal budgets for infrastructure upgrades and urban renewal, as this will encourage more private sector housing development,” says Botha.
Finally, Goslett states that he remains optimistic for the year ahead and is hopeful that the Budget Speech will bring no unpleasant surprises for homeowners. “There should not be any surprises in the 2019 National Budget for property owners, especially not so close to the national elections. If any serious changes were to be made, I expect that they would only be announced at the Medium Term Budget Policy Statement (MTBPS) in October,” Goslett concludes.