Search Property For Sale

Experts, leaders in the industry believe #Budget2018 is not all bad news

Google+ Pinterest LinkedIn Tumblr +

The Budget is expected to go a long way towards reaffirming investor confidence in real estate

Despite the Budget negatives for the property market, FNB’S John Loos still anticipates a “slightly stronger” housing market this year. “This is because of our expectation for mildly stronger economic growth, which can mean faster household disposable income growth this year, despite tax increases.”

The fact that there is still an exemption from transfer duties on properties up to R900 000 is also welcome news, says Absa’s Jacques du Toit. He says the low CPI and strong rand will increase the possibility of lower interest rates, “which can have a positive effect on the property market in the long run”. 

It will also make it easier for more consumers to save deposits and afford monthly bond repayments on their own homes, says Gerhard Kotzé, managing director of the RealNet estate agency group. 

According to Rabie’s Colin Anderson, “huge factors” also affecting the property industry are business and consumer confidence. “Recent political developments and promises made by the new president, if delivered, could substantially boost business and consumer confidence, thus mitigating negative impacts on the property industry from the Budget”.

Because the property market is fuelled by sentiment, the Budget is expected to go a long way towards reaffirming investor confidence in real estate, says Pam Golding Properties’ Andrew Golding.

The key factor of renewed consumer confidence will also help to improve property prices and demand in 2018, says Herschel Jawitz of Jawitz Properties.

Tyson Properties managing director Chris Tyson believes the VAT increase is “not enough to deter buyers”.“It will affect both sellers and buyers, but not significantly.”Another positive is that there is no VAT payable on residential property rentals, says Rowan Alexander of Alexander Swart Property Group.

“Tenants currently renting residential properties need not be concerned their rentals will be increased due to the increase in VAT. Investors and investment groups may be attracted to the buy-to-let market due to the absence of VAT obligations and increased demand for rental property.”

Property continues to be a good investment, agrees Mike Greeff of Greeff Properties.

“The Budget has laid out plans to move South Africa’s economy out of its current stagnation and predicts an increase in GDP growth.”

The commitment to reshape the public service and cut government spending by around R85 billion will hopefully stave off a ratings downgrade to total junk, help attract more private sector investment, and boost the employment rate faster, says Berry Everitt, chief executive of the Chas Everitt International property group.

“More jobs will mean more property sales and rents, and rising investor confidence will help keep inflation in check and could even mean interest rate cuts this year. 

That would make it easier for more people to qualify for home loans, and our understanding is that banks are keen to see this happen, so our outlook for residential property over the next 12 months is distinctly positive.”

Jawitz says: “While the Budget provides no financial impetus for the recovery of the residential market, the key factor of renewed consumer confidence will help improve property prices and demand.”

Like us on Facebook

Property360

Share.

About Author