Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
“Speaking from a property perspective, this is a market which is fuelled by sentiment, and as a consequence, a Budget which satisfies the above criteria – on the back of the election of President Ramaphosa – is expected to go a long way towards reaffirming investor confidence in real estate.
“South Africans continue to demonstrate an increasing appetite for home ownership which is to be encouraged as it helps provide security of tenure and financial security for the future.”
Dr Golding says an interesting aspect of the Budget Speech is the proposal that some 195 000 government-owned properties, with an estimated value of over R40bn, would either be better used or sold in the short to medium term, which could unlock revenue as well as opportunities for property development and redevelopment.
“And while we await further detail, the commitment to drive both urban and township development and stimulate faster and more inclusive growth augurs well for infrastructural investment and the facilitation and expansion of economic hubs, especially along key transport corridors.
“Also positive is the allocation of R6 billion for purposes which include drought relief and to augment public infrastructure investment.”
Adds Dr Golding: “While the increase in VAT from 14% to 15% is unpalatable and erodes consumer disposable income – particularly among lower income earners, it was anticipated and is hoped will go a long way towards offsetting the Budget deficit. Welcome news for lower and middle-income earners is the adjustment of the bottom three personal income tax brackets for inflation.
“It is true however that the 52c a litre increase in levies on fuel will impact across the economy, as rising transport costs have an inflationary, ripple effect.
“While growth forecasts for our economy appear increasingly positive, it will become evident in the coming days and weeks as to how the credit ratings agencies will respond to the Budget.”
