Actually, there are plenty of property positives in the Budget

While the response from the real estate industry has generally been negative, there were quite a few positives for property in this week's Budget.

The first of these, says Dr Piet Botha, chairman of the Nationlink estate agency group, was Finance Minister Trevor Manuel's assurance that inflation will be within the target range of 3 to 6 percent by the end of this year.

"All things being equal, the Reserve Bank will then be able to lower interest rates - which have proved again and again to be the single most important factor persuading home seekers to buy or not to buy."

Then there was the news, he says, that government is still budgeting for a surplus over the next three years, even after having to make a "crisis allocation" of more than R60bn to Eskom to help overcome the energy shortage.

"This, combined with the massive R17bn allocation for spending on roads, water systems and other infrastructure, should significantly increase business and consumer confidence, which is arguably the second most important factor influencing property purchasing decisions."

What will have a direct effect on the real estate market, says Botha, is the allocation of some R53bn over the next three years for the provision of housing for the poor, and even more exciting is the fact that government has at last acknowledged it needs to do more to accommodate private sector employers, developers, builders and landlords who are participating in the process.

"It is to this end that government is to revise the tax incentive for employers who provide housing for low-income employees, and has decided to extend the incentives for the development and redevelopment of affordable inner city housing for the next five years.

"Government definitely seems to be laying the groundwork for a huge increase in the amount of housing stock in just a few years, and that will mean a corresponding rise in the number of people with direct access, through their own homes, to the property market."

Meanwhile, Mr Manuel has committed huge resources to skills development, support for small businesses and job creation - which lay at the heart of this year's Budget - and such measures should soon raise the number of people able and keen to participate in the middle- and upper-income sectors of the property market instead of being restricted to homes provided by the State.

In short, Botha says, the size of SA's real estate market is set to double and redouble over the next few years, "and while that might require the traditional players to adapt and operate differently, the opportunities there will be for wealth creation can hardly be viewed as a negative."
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