Representatives of South Africa’s real estate industry are criticizing the government’s failure to furnish incentives for recovery, saying more is needed to facilitate home ownership — both as a fundamental right and a stimulus to the broader economy. While current budget plans include property tax relief, offering free land for development would help hasten progress and compare favorably with international rescue efforts. See the following article from Property Wire for more on this.
The South African government should make large tracts of state owned land available to developers free of charge to speed up the recovery of the country’s real estate market, it is claimed.
The real estate industry says it is disappointed at a lack of enthusiasm in government circles to help the property market which has been hit by the global economic downturn.
Although Finance Minister Pravin Gordhan’s first budget could boost sales in the form of R6.5 billion of tax relief for property buyers, that alone is not enough, they claim.
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‘The budget does not contain many direct benefits for the real estate industry although a largely positive outlook could have a spin-off for the property market,’ said Berry Everitt, of the Chas Everitt International property group.
Young Carr, chief executive officer of Aida National Franchises, said some measures such as a commitment to sit down with banks and address the issues of charges will help. ‘Every small saving that will put more money in consumers’ pockets will contribute to kick starting an economic revival,’ he said.
But many had hoped for more. Gerhard Kotz, of the ERA SA property group, said the minister had failed to stimulate the property market. ‘The Budget was disappointing, given what’s happening to stimulate property markets globally and taking into account property’s generous contribution to our overall GDP,’ said Kotze.
He would have liked to have seen broad tax incentives for home buyers, greater clarity on interest rates and improved investment incentives for developers as has been done in overseas markets. ‘House price affordability is the key and in the UK, for example, various incentives mean that more people with average earnings can now afford to buy their first house and the house price-to-earnings ratio is at its lowest level in more than six years, making it easier to get on the property ladder,’ he said.
‘The latest Absa house price index, for example, shows that the upward trend in nominal house price growth evident since the middle of 2009 continued in January, although real prices continued to decline up to December last year,’ he added.
Tjaart van der Walt, chief executive officer the RealNet estate agency group, said more should have done to help more people buy their own home. ‘The R1 billion allocated to speeding up housing provision is disappointing. The figure is a drop in the ocean. A large percentage of South Africans have low incomes and need help to gain secure tenure,’ he said.
‘Not only is it a basic human right, but large-scale housing incentives will create many jobs, which in turn will contribute significantly to reducing unacceptable crime levels,. To speed up housing delivery the government make large tracts of state land available to developers free of charge,’ he added.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.