SONA – Good News for Property Sector
The State of the Nation Address delivered on Thursday, 7 February 2019, by South African President, Cyril Ramaphosa touched on various economic issues in South Africa.
Ramaphosa touched on the real estate industry, including the need to rebuild investor and consumer confidence in South Africa, stimulate economic growth, accelerate job creation and eliminate widespread corruption.
According to Betterbond CEO, “the SONA was very wide-ranging and covered a huge number of initiatives, but there were definitely some highlights for the real estate market.”
Basically, higher home ownership and the increased personal wealth that this brings is dependent on three things: investor confidence, economic growth and job creation, and the SONA made it clear that President Ramaphosa and his team were going to work hard to make all of this happen.
“They have openly addressed and taken action on things that make potential investors nervous, such as a previous lack of clear policy direction in mining and land ownership, rampant corruption and the near-collapse of State-Owned Enterprises like Eskom,” says Botha.
“They have also been very open to working with the private sector to accelerate the implementation of many new projects that will stimulate economic growth and job creation.”
The future isn’t looking too shabby, if you’re an optimist.
They have openly addressed and taken action on things that make potential investors nervous.
“Looking ahead, we are particularly pleased by the establishment of the new R100bn National Infrastructure Fund to leverage private investment into the revitalization of existing infrastructure and the development of new roads, railways, dams, harbours, hospitals and schools – as well as the provision of urgently needed student housing at tertiary institutions,” says Botha.
The People’s Housing Programme and the Human Settlements Development Bank
Government intends to expand the People’s Housing Programme, which provides serviced stands to households and housing collectives that are prepared to build their own homes and is to set up a Human Settlements Development Bank to leverage private sector investment in new housing.
“The establishment of the new Human Settlements Development Bank has real potential to solve SA’s social housing shortage within a few years, especially if its plans are integrated with those to release large tracts of State-owned land in strategic urban locations for housing development, and to recapacitate local authorities and rebuild local infrastructures,” says Botha.
Meanwhile the special presidential task force on reducing the constraints on the establishment of new businesses – and especially small businesses – could be a real game-changer in enabling more South Africans to earn enough to buy their own homes. Small business is after all the major engine of job creation, and jobs plus confidence in the future are the foundation stones of a healthy property sector.