The frank and unusually hard-hitting tone of this year’s State of the Nation Address (SONA), which confronted the scale of South Africa’s challenges head-on while outlining a series of decisive reforms, should be welcomed by the property sector.
So says Stephen Whitcombe, MD of leading Johannesburg property company FIRZT Realty, who notes that for an industry that is deeply intertwined with economic growth, investor confidence and the quality of local governance, the President’s decision to make crime the first focus of his address was both significant and reassuring.
“The acknowledgement that organised crime is now the most immediate threat to democracy and economic development reflects what developers, investors and many property owners have unfortunately been experiencing on the ground: building sites disrupted, workers threatened, communities destabilised, buildings and homes being hijacked and investment decisions being delayed by insecurity.
“So the planned consolidation of intelligence, deployment of multidisciplinary intervention teams, establishment of a dedicated criminal justice reform initiative in the Presidency and deployment of an additional 5500 police officers this year is positive news.
“And the commitment made to restructure government procurement systems and strengthen whistle-blower protections is equally critical. For property developers and institutional investors, certainty and the consistent enforcement of contracts are fundamental to unlocking capital.”
The focus on water as the next priority issue, he says, should also resonate strongly with the real estate industry. “Access to reliable water and sanitation services is not only a basic human right but a prerequisite for property development, urban regeneration and investment.
“So we are enthusiastic about the commitment of more than R156bn over the next three years for water and sanitation infrastructure, the creation of a National Water Crisis Committee chaired by the President, and the establishment of a National Water Resource Infrastructure Agency.
“We also applaud the plan to hold failing municipalities and municipal managers accountable where service delivery collapses. There are too many instances where water revenues have been diverted to ‘other projects’ while water pipes, reservoirs and pumping stations were not maintained and fell into decay as a result. This is at the root of many of the water outages that residents across SA are currently experiencing.”
Meanwhile, says Whitcombe, the proposed total overhaul of local government, including a revised White Paper to be finalised later this year, addresses a long-standing concern in the real estate market: that infrastructure decay, poor financial management and political interference at municipal level have eroded confidence in many towns and cities.
“The real estate sector depends on functioning municipalities to deliver electricity, maintain roads, process plans and protect property rights. A more professionalised, merit-based system for appointing senior municipal officials is an essential step toward restoring that confidence.”
On the economic front, he notes, the President’s emphasis on infrastructure-led growth is particularly significant. “Government’s commitment to spend more than R1trn of public funds on infrastructure development over the next three years - alongside innovative funding models and public-private partnerships - has the potential to unlock job creation at scale.
“And for the property industry, improved logistics, efficient ports, reliable rail and affordable electricity are not abstract policy goals. They directly affect land values, development viability and the competitiveness of South African cities.
“The restructuring of Eskom as a transmission entity and the continued expansion of renewable energy investment is also good news because reliable and competitively priced power remains one of the most important determinants of investor appetite, not only in the commercial and industrial property sectors but in the residential sector too. This is evident from the increasing buyer focus, currently, on energy-efficient homes, preferably with a solar power system already installed.”
Also significant, says Whitcombe, is the government’s commitment to establish the long-awaited State Property Company to professionally manage the state’s extensive portfolio of 88 000 buildings and at least 5m ha of land. “This could be really transformative for the country if implemented effectively, because professional asset management of public property has the potential to unlock underutilised land for development, catalyse urban renewal projects and create new mixed-use precincts that integrate affordable housing, commercial activity and public services.
“In addition, we did note the mention of a new housing subsidy model that will enable people to access financial help to rent affordable homes and not only to buy or build them. This recognises changing household structures and labour mobility patterns, particularly among young people entering the workforce. A more flexible subsidy framework could stimulate private-sector delivery of more affordable rental housing and help address the spatial legacy that keeps many working families in SA far from economic opportunity.
“However, while the goals outlined are substantial, the property sector’s message must be that swift implementation is the real key to creating significant economic growth and employment and enabling all South Africans to live in safe, properly serviced and well-connected areas.
“SA never has any shortage of ideas or plans. What is required now is disciplined execution, transparent timelines and measurable outcomes. And like most in our industry, we’re ready to work with government and other stakeholders to translate this reform agenda into tangible projects that create lasting value in our cities and towns.”
Issued by FIRZT Realty
For media inquiries contact
Stephen Whitcombe on
082 412 2949
Or visit www.firzt.co.za
About FIRZT Realty
Established in 2003, FIRZT Realty initially focused on residential real estate, but has since expanded to offer a broad range of services in both the residential and commercial property sectors, including sales, rentals, auctions and property management.
