South African government should make large tracts of state owned land
available to developers free of charge to speed up the recovery of the
countrys real estate market, it is claimed.
The real estate industry says it is disappointed at a lack of enthusiasm
in government circles to help the property market which has been hit by
the global economic downturn.
Although Finance Minister Pravin Gordhans first Budget could boost
sales in the form of R6.5 billion of tax relief for property buyers, that
alone is not enough, they claim.
The Budget does not contain many direct benefits for the real estate
industry although a largely positive outlook could have a spin-off for
the property market, said Berry Everitt, of the Chas Everitt International
Young Carr, chief executive officer of Aida National Franchises, said
some measures such as a commitment to sit down with banks and address
the issues of charges will help. Every small saving that will put
more money in consumers pockets will contribute to kick starting
an economic revival, he said.
But many had hoped for more. Gerhard Kotz, of the ERA SA property group,
said the minister had failed to stimulate the property market. The
Budget was disappointing, given what's happening to stimulate property
markets globally and taking into account property's generous contribution
to our overall GDP, said Kotze.
He would have liked to have seen broad tax incentives for home buyers,
greater clarity on interest rates and improved investment incentives for
developers as has been done in overseas markets. House price affordability
is the key and in the UK, for example, various incentives mean that more
people with average earnings can now afford to buy their first house and
the house price-to-earnings ratio is at its lowest level in more than
six years, making it easier to get on the property ladder, he said.
The latest Absa house price index, for example, shows that the upward
trend in nominal house price growth evident since the middle of 2009 continued
in January, although real prices continued to decline up to December last
year, he added.
Tjaart van der Walt, chief executive officer the RealNet estate agency
group, said more should have done to help more people buy their own home.
The R1 billion allocated to speeding up housing provision is disappointing.
The figure is a drop in the ocean. A large percentage of South Africans
have low incomes and need help to gain secure tenure, he said.
Not only is it a basic human right, but large-scale housing incentives
will create many jobs, which in turn will contribute significantly to
reducing unacceptable crime levels,. To speed up housing delivery the
government make large tracts of state land available to developers free
of charge, he added.