Publications
Partners
Cape Town - From a property market perspective, it is disappointing to note that there was no property specific tax relief or schemes introduced which would help home ownership generally, but in particular first time home ownership, said Dr Andrew Golding, CEO of the Pam Golding Property group.
"However, new spatial plans for cities, upgrading informal settlements, increased social infrastructure and improved public transport, coupled with the announcement of 216 000 houses to be built, is positive news,” he said.
“The introduction of an integrated city development grant – to the tune of R814m over the medium term – in order to strengthen long-term city planning and encourage private investment in urban development is encouraging, as is the R3.9bn allocated to capacity building programmes (including upgrading human settlements) in the Medium Term Expenditure Framework, targeted at small towns and rural municipalities."
“We are also encouraged to hear that there are moves to entrench the rights of all investors, ensuring that property rights are protected - in line with the Constitution, under the new Promotion and Protection of Investment Bill which has been released for public comment," he said.
From a Pam Golding Properties perspective, the property market has since the start of 2014 generally been characterised by an air of positive sentiment, increased activity levels with a marked shortage of stock in many areas around the country and brisk sales, despite the recent 0.5% interest rate increase.
Seeff chairperson, Samuel Seeff hailed Gordhan’s "good news" budget as positive for the housing market.
"It was a positive budget given the current economic pressure; one that encourages economic and job growth, both vital factors for the property market," he said.
On the down-side, he is disappointed that there is no relief on property transaction costs and capital gains tax, both vital aspects in the market.
"Transfer duty especially forms part of the costs associated with a property transaction and considering that this can equate up to 20% of the purchase price, this does remain an impeding factor, especially for the lower to middle end of the market," said Seeff.
While no real fireworks yet, Seeff said that the property market is in the healthiest position since the economic downturn, pre-2007/8.
It seems to be defying the economic trend: while growth has slipped over the last year, property has taken off, although still primarily in the metropolitan areas.
Bill of concern
Rawson Property Group managing director Tony Clarke said there should be warning bells around Gordhan's support of the promotion and protection of investment bill, which he claims "entrenches the rights of all investors, ensuring that property rights are protected, in line with the Constitution".
"This is somewhat disingenuous as most legal objections to the bill point out that it removes the obligation of international arbitration in the case of disputes, does not link compensation to full market value and contains no mention of ‘fair and equitable’ treatment of investors," said Clarke.
"Instead, they can bring a dispute only to a South African court or to the South African government for mediation."
At a time when SA needs to be encouraging foreign investment, this bill will make the already cautious financiers even more jittery, said Clarke.
He did, however, welcome Gordhan's decision to assign R814m over the medium term towards an integrated city development grant.
"Measures that encourage private investment in our urban landscape are essential in developing a thriving economy," said Clarke.
"It is good to see that the government is supporting such incentives. Unfortunately, that R814m will not go far. To put it in perspective, the total cost of the Gauteng e-tolling connection system will be R14bn, plus the R20bn being spent on existing roads.”
"However, new spatial plans for cities, upgrading informal settlements, increased social infrastructure and improved public transport, coupled with the announcement of 216 000 houses to be built, is positive news,” he said.
“The introduction of an integrated city development grant – to the tune of R814m over the medium term – in order to strengthen long-term city planning and encourage private investment in urban development is encouraging, as is the R3.9bn allocated to capacity building programmes (including upgrading human settlements) in the Medium Term Expenditure Framework, targeted at small towns and rural municipalities."
“We are also encouraged to hear that there are moves to entrench the rights of all investors, ensuring that property rights are protected - in line with the Constitution, under the new Promotion and Protection of Investment Bill which has been released for public comment," he said.
From a Pam Golding Properties perspective, the property market has since the start of 2014 generally been characterised by an air of positive sentiment, increased activity levels with a marked shortage of stock in many areas around the country and brisk sales, despite the recent 0.5% interest rate increase.
Seeff chairperson, Samuel Seeff hailed Gordhan’s "good news" budget as positive for the housing market.
"It was a positive budget given the current economic pressure; one that encourages economic and job growth, both vital factors for the property market," he said.
On the down-side, he is disappointed that there is no relief on property transaction costs and capital gains tax, both vital aspects in the market.
"Transfer duty especially forms part of the costs associated with a property transaction and considering that this can equate up to 20% of the purchase price, this does remain an impeding factor, especially for the lower to middle end of the market," said Seeff.
While no real fireworks yet, Seeff said that the property market is in the healthiest position since the economic downturn, pre-2007/8.
It seems to be defying the economic trend: while growth has slipped over the last year, property has taken off, although still primarily in the metropolitan areas.
Bill of concern
Rawson Property Group managing director Tony Clarke said there should be warning bells around Gordhan's support of the promotion and protection of investment bill, which he claims "entrenches the rights of all investors, ensuring that property rights are protected, in line with the Constitution".
"This is somewhat disingenuous as most legal objections to the bill point out that it removes the obligation of international arbitration in the case of disputes, does not link compensation to full market value and contains no mention of ‘fair and equitable’ treatment of investors," said Clarke.
"Instead, they can bring a dispute only to a South African court or to the South African government for mediation."
At a time when SA needs to be encouraging foreign investment, this bill will make the already cautious financiers even more jittery, said Clarke.
He did, however, welcome Gordhan's decision to assign R814m over the medium term towards an integrated city development grant.
"Measures that encourage private investment in our urban landscape are essential in developing a thriving economy," said Clarke.
"It is good to see that the government is supporting such incentives. Unfortunately, that R814m will not go far. To put it in perspective, the total cost of the Gauteng e-tolling connection system will be R14bn, plus the R20bn being spent on existing roads.”
