Cape Town - Several items highlighted in President Jacob Zuma's State of the Nation speech this week hold significant benefits for the property market.
This is according to Lew Geffen, chairperson of Sotheby’s International Realty in SA, who noted that at the macro level, both foreign and local investors would have been pleased to hear Zuma categorically stating that the debate over nationalisation of the mines has been “laid to rest”.
Also encouraging is that the government, labour and the mining companies have reached an agreement to strengthen social stability and actively contribute to community upliftment in mining towns around the country.
“This will no doubt allay many of the fears that led to SA receiving credit rating downgrades from all three major agencies last year, and will hopefully also lead to an increase in the political and economic confidence that is such a fundamental ingredient of a thriving real estate market,” said Geffen.
The details of the progress made on the infrastructure and job creation fronts were also encouraging. “People hear of huge amounts being allocated to these initiatives in the national budget every year, but it is seldom that they get to hear how this money has actually been spent, so the news of the projects completed in the past three years and those now under way was positive.
“In a country like SA, infrastructure and job creation are heavily interrelated and obviously also essential to the growth of the property sector.
"Infrastructure projects in themselves are usually creators of the employment needed for people to become homeowners but also have a huge multiplier effect by facilitating business growth and improving living conditions,” said Geffen.
At the more specific level, according to Geffen, the most exciting news contained in Zuma's speech was that concerning the establishment of a National Urban Development Plan – a co-ordinated national, provincial and municipal roadmap to help South Africa’s major cities move faster to deal better with the demands of rapid urbanisation.
“There is no doubt that the infrastructure and services in our cities have been deteriorating under the strain of trying to accommodate the needs of 63% of the population, as evidenced by crumbling roads, increasingly frequent water and power outages, traffic congestion due to inadequate public transport systems, and high crime rates.
“But the fact that there is now a national plan to put things right and acknowledgement of the need to leapfrog the limitations of inefficient and often incompetent local authorities is hopeful, and if it can be implemented quickly to reclaim and rebuild our cities, not only as industrial and commercial centres, but as pleasant places to live and work, significant benefits will flow to the property market as a whole.”
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