State of the nation and the impact on property

Addressing the nation, President Jacob Zuma made some interesting comments that are likely to have a major impact on the property industry in the future, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.

He notes that an issue that has been affecting households throughout South Africa is the ongoing power constraints which have put a large strain on the economy over the last year. The energy supply problems have impeded economic growth, which is likely to have a domino effect on the property market if the matter is not resolved. Zuma addressed this issue stating that government has made this a top priority and will stabilise Eskom’s finances to enable the utility provider to manage the current period. In this regard, government will honour its commitment to give Eskom around R23 billion during the next fiscal year.

“Hopefully this will assist in resolving the issue during the short term, while the country continues to seek a long term solution through alternative energy supplies,” says Goslett. “Households have to deal with increasing electricity tariffs, which has largely outweighed any positive impact made by the drop in fuel prices. A solution to the energy crisis will boost the economy, which will have a knock-on effect on the property market.”

Another point that was made at the State of the Nation Address that will have an impact on the property industry is the fact that foreign nationals will no longer be allowed to own land in South Africa, but will be eligible for long term lease. Although there was discussion around this position before yesterday’s speech, it was expected that foreigners would only be restricted to some degree when purchasing land.  The bill has been tabled for later this year. The purpose of the bill will be to stop reliance on the willing buyer-willing seller method in respect of land acquisition by the state.

“While we recognise the fact that a bill will be implemented later this year limiting foreign land ownership, which is a concern to the real estate industry, the more concerning issue is the lack of stability displayed at the State of the Nation Address, which in turn could impact on foreign capital investment into the country,” says Goslett. “This in itself could lead to a lack of infrastructure development as well as a lack of employment opportunities for South Africans. We trust that the leadership of the country will make the right decisions that are in the best interest of its people,” he concludes.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us