SA’s vaccine campaign is critical to enable safe, economic recovery and the creation of jobs as fast as possible - key factors for homeownership and real estate investment. Here's what property industry experts had to say about SONA 2021.
President Cyril Ramaphosa’s state of the State of the Nation Address (SONA) on Thursday evening had the tough task of addressing issues of corruption, economic growth and reform and the lack of infrastructure to service the country – “the same subjects addressed in SONA 2020”.
The SONA delivered by the president was generally encouraging for the real estate sector, says Gerhard Kotzé, MD of the RealNet estate agency group, as it outlined some practical and immediate responses to the economic devastation and employment loss that has been brought about by the Covid-19 pandemic - across all sectors of the economy.
Vaccine campaign critical for ERRP to be put into effect
Kotzé says, “Between 1,7m and 2,2m jobs have been shed in the past year and the unemployment rate is officially at 31% but is more like 43% if one counts the people who have become so disheartened about finding a job that they are not even looking anymore."
Yael Geffen, CEO of Lew Geffen Sotheby’s International Realty says "Ramaphosa has laid the bulk of responsibility for job creation this year at the door of the private sector, which categorically does not have the capacity in the current economic climate to step up to the plate. In fact, current policies are largely punitive and further diminish the private sector’s capacity to contribute to growth.”
Geffen says perhaps the most telling statistic to emerge from the speech is that the national economy has shrunk by 6% since Q4 of 2019.
SA’s vaccine procurement and distribution plans are most critical to enable the economy to open up safely and start recovering and creating jobs as fast as possible, and subsequently increasing both home ownership and real estate investment, adds Kotzé.
Berry Everitt, CEO of the Chas Everitt International property group agrees, saying “achieving ‘herd’ immunity and very low rates of Covid-19 infection will allow government to shift attention and direct more resources to achieving the objectives of the Economic Reconstruction and Recovery Plan (ERRP) that was created last year”.
While the extension of the TERS benefit is a very necessary measure to alleviate the extreme poverty in which many South Africans currently find themselves, Everitt stressed the importance for the success of the vaccine campaign to “open up the economy, attract new investment, increase our GDP and create large numbers of new jobs”, he says.
Changes to the Electricity Regulation Act welcomed
Kotzé also noted that while restructuring Eskom was still a major concern, progress to allow local authorities to procure their own power supplies.
"Achieving sufficient, stable and sustainable power supply is required to support all aspects of SA’s economic recovery and restore investor confidence. We are pleased by the announcement that Bid Window Five for independent producers of wind and solar power will be opened within days, and that there will be another window later this year.
“In addition, we welcome the changes to the Electricity Regulation Act which will allow local authorities to procure or create their own power supplies. Stellenbosch and George have already announced plans to do this, and these towns and any others who follow suit will be the ‘winners’ in terms of attracting new residents and new commercial enterprises as the post-Covid trend towards de-urbanisation grows,” says Kotzé.
Everitt added that the implementation of the ERRP in the reconstruction of SA’s basic infrastructure, the expansion of digital access, the creation of large new human settlements – including the new Smart City near Lanseria was also encouraging, as are the efforts being made to support the local production and manufacturing of a wide range of goods that would otherwise need to be imported.
“From our point of view, the steps being taken to recapacitate the many dysfunctional local governments with properly qualified employees and the amendments to the Electricity Regulation Act to allow municipalities to move away from Eskom and produce or procure their own electricity are also most welcome benefits of this new alliance."
Investor confidence - R774bn of the five-year target of R1,2trn raised
It was also impressive, Everitt says, to learn that the President’s annual investment conferences have now attracted almost R774bn of the five-year target of R1,2trn.
“This indicates that SA is still an attractive investment option in global terms, and that there is still considerable positive sentiment among both local and foreign companies, despite the economic setbacks of the past few years. Such confidence among business leaders and consumers is a vital component of a healthy property market, as it leads to job creation and an increased demand for both residential and commercial property.”
Well-run towns lead to a thriving property market
The SONA also made clear that the pandemic has resulted in a much closer understanding between government, business, labour and civil society organisations and that this is already paying off in a number of ways – including the use of technology to improve the ease of doing business in SA, and the rapid reform of the immigration requirements for skilled workers.
“Towns that are well run, clean and in a position to supply services like water, electricity and refuse removal as well as excellent internet connectivity are those most likely to attract and retain new enterprises, new residents and new investment - and to have a thriving property market. Consequently, we hope that this will steadily become the norm in most SA towns and cities,” says Everitt.
