Rodney Hayter

SUN CITY (February 07) – Government has been called upon to unshackle the current property market slowdown by giving more meaningful support to home ownership by launching a “package” in the March 28 budget structured specifically around assisting first time homebuyers.

Ideally, first priority should be around tax relief on home loans for a specific period, based on the selling price of the home, and also extending the current transfer duty relaxation from R500 000 to R1m.

The appeal was made at Sun City today by Jeanne van Jaarsveldt, finance and marketing director of RE/MAX of Southern Africa, in his opening address at the group’s 13th convention. A key feature of the convention is its focus on finding ways to assist first-time buyer affordability, which van Jaarsveldt said had become “critical” in terms of the need for action.

While acknowledging the call for tax relief on mortgage repayments was an industry perennial, Van Jaarsveldt said the situation had become far more serious in its necessity from a social, financial welfare point and even job creation point of view. The first time market was in threat of being strangled by rate increases, tighter credit and market uncertainty.

The irony of the current situation was that unsuccessful first time buyers were now crowding an already bursting-at-the-seams rental market and inevitably inflating the cost of rentals. This situation also needed to be urgently addressed in the “package” by encouraging developers to build lower end rental stock through tax incentives, such as scrapping of VAT on new homes and dedication to energy saving measures. Certain foodstuff, based on their necessity enjoyed VAT relaxation, so too should homes in the lower end of the market be allowed the same benefit.

There was also a “dire need” for streamlining and speeding up the processing approval of new residential developments by local authorities. This needed to be orchestrated by central and provincial government with a no-nonsense approach and disciplining local authorities for unjustifiable slow processing.

“After the high rate increases and tighter credit the slow processing is proving the straw capable of breaking many of the remaining developers back and needs to be urgently addressed by the state before developers become an endangered species.”

Van Jaarsveldt admitted he was one of many industry captains greatly disappointed at the lack of communication between the Housing Ministry and the residential sector through the national Institute of Estate Agents on all housing issues. The Institute, like other industry voluntary bodies, was anxious to assist the state in anyway possible, but had been totally ignored as a helpful source of knowledge. Apart from the state’s failure to recognise the Institute’s depth of experience their discounting of its potential value was sad in the context of the urgency to house the nation and indicative of a myopic attitude.

Article by: Rodney Hayter - www.rodneyhayter.com