Budget – Neville Schaefer

News > news - 21 Feb 2007

There's not much more the government's February 21 budget can do for the property market except perhaps adjust transfer duty, says Neville Schaefer, CEO of Trafalgar the national property managers.

"But there is much more legislation, education and leadership needed to ensure that millions more home owners - mainly poor - can use their property to build wealth," he adds. "This is the most powerful form of black economic empowerment available to us."

"The South African property market is doing just fine. The average person who bought an average home for R200 000 in 1999 now has R600 000 equity in his R800 000 property - less any equity he or she withdrew by increasing their bond. I believe the market still has another five or six year to grow."

But Schaefer says that only applies to the two million or so homeowners in the established house market. Government, banks and agents have done a lot to increase that from only about 1,5m a few years ago. There are another 6m homeowners not yet in the property market.

"Creating a secondary house market in the townships isn't enough. People don't automatically understand how it works or how value is built - and properly used -- in a home. That needs education, which the estate agency affairs board has the money and power to do."

But the biggest task is creating legislation to enable leasehold ownership of tribal trust land, negotiating this with traditional leaders and, again, educating, the beneficiaries of it.

"Trevor Manuel has done his bit for the process by drastically reducing transfer duty. He could raise the transfer duty threshold by another R500 000 to adjust for property price increases, but he shouldn't do too much and overheat the market."

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