|The SA property industry is looking forward to a property-friendly Budget on Wednesday, according to David Rogers, MD of Homenet, which is Africa's biggest estate agency group.|
"Property and economic health in general are obviously closely linked and the expectation is that South Africans will hear good news on questions of tax deductions, relaxation of foreign exchange allowances, investment incentives, infrastructure expenditure and social upliftment programmes when Finance Minister Trevor Manual delivers his national Budget on Wednesday
"The general effect is expected to be a further boost for consumer and business confidence. This will give the stock market fresh impetus, draw additional fixed investment from local and overseas sources, boost job creation and spin off into greater demand for commercial, industrial and
What is more, says Rogers, interest rates are not expected to rise in the near future (and may even be cut later in the year), while the Minister may even see fit to reduce home ownership entry costs such as transfer tax, to encourage property investment by the growing black middle class.
"And there's an outside chance that he may introduce direct tax allowances on mortgage repayments, as in the US and UK, given the multiple benefits a healthy property market has been seen to have for the economy as a whole."
Meanwhile, says Rogers, it is worth considering the likely effects of the rumoured relaxation of foreign exchange controls.
"Much has been said and written about the relative strength of the rand and the problems it's creating for exporters who find it increasingly difficult to compete in international markets. Agriculture, mining and certain manufacturing sectors would all receive a boost from a softer rand, which
could come about if an easing of forex controls stimulates the SA appetite for offshore investments."
"In addition, a weaker rand would boost foreign tourism and might well result in a further increase in overseas buyers on the South African property scene."
Overall, he says, the property market ahead of the Budget is sound, with leading mortgage lender Absa suggesting price growth will still be ahead of inflation this year. "But if the Budget succeeds in further stimulating the economy as we expect, that prediction could actually turn out to be quite