State of the Nation ‘encouraging’ for property

The State of the Nation speech delivered by President Jacob Zuma this week (subs: 14 Feb) contained several items of encouraging news for SA’s property industry.

So says Lew Geffen, chairman of Sotheby’s International Realty in SA, who notes that at the macro level, both foreign and local investors will have been pleased to hear the President say categorically that the debate over nationalisation of the mines has been “laid to rest”, and also that government, labout and the mining companies have reached an agreement to strengthen social stability and actively contribute to community upliftment in mining towns around the country.

“This will no doubt allay many of the fears that led to SA receiving credit rating downgrades from all three major agencies last year, and will hopefully also lead to an increase in the political and economic confidence that is such a fundamental ingredient of a thriving real estate market.”

Also encouraging, he says, were the details of the progress made on the infrastructure and job creation fronts. “People hear of huge amounts being allocated to these initiatives in the national budget every year, but it is seldom that they get to hear how this money has actually been spent, so the news of the projects completed in the past three years and those now under way was positive.

“In a country like SA, infrastructure and job creation are heavily interrelated and obviously also essential to the growth of the property sector. Infrastructure projects in themselves are usually creators of the employment needed for people to become homeowners but also have a huge multiplier effect by facilitating business growth and improving living conditions.”

At the more specific level, Geffen says, the most exciting news contained in the President’s speech was that concerning the establishment of a National Urban Development Plan – a co-ordinated national, provincial and municipal roadmap to help SA’s major cities move faster to deal better with the demands of rapid urbanisation.

“There is no doubt that the infrastructure and services in our cities have been deteriorating under the strain of trying to accommodate the needs of 63% of the SA population, as evidenced by crumbling roads, increasingly frequent water and power outages, traffic congestion due to inadequate public transport systems, and high crime rates.

“But the fact that there is now a national plan to put things right and acknowledgement of the need to leapfrog the limitations of inefficient and often incompetent local authorities is hopeful, and if it can be implemented quickly to reclaim and rebuild our cities, not only as industrial and commercial centres, but as pleasant places to live and work, significant benefits will flow to the property market as a whole.”

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