February 21 2023
It’s that famous time of the week – budget day is looming and will take place on Wednesday February 22. Seeff Property Group and other real estate agents agree that South Africa (SA) desperately needs a pro-growth budget aimed at returning the economy to a growth trajectory. Everything is looking extremely dire as Eskom fails SA’s citizens and infrastructure crumbles. The cost of living has skyrocketed and millions of people’s mental health is under strain. House sales volumes are down and business and consumer confidence are at new lows.
“We would like to see the interest rate come down again so that the property market can be reignited,” says Samuel Seeff, chairman of the Seeff Property Group.
This would require a containment of costs, especially those resulting from the Eskom-energy crisis.
“It is therefore vital that urgent measures are taken to stabilise Eskom and the energy supply. We also need to see investment into infrastructure maintenance and development, essential for economic growth,” Seeff says, sounding like a broken record.
One really hopes that a government that appears lost as to how to solve a single national problem, listens to what he and other commentators say.
Seeff explains that the budget needs to encourage local municipalities to take a bigger role in alleviating the pressure of power outages through measures such as taking traffic lights off the grid, whether with solar or back-up battery systems.
“We would like to see tax breaks for solar and alternative energy solutions for households as well as businesses as an urgent boost to keep the economy moving. More funding to combat crime and corruption is also vital, including proper and efficient mechanisms and staffing. For the housing market, the house price threshold for exemption from Transfer Duty should be increased as it has been R1m for more than two years,” says Seeff.
Transfer duty also needs an overhaul to reduce transaction costs, especially for first time buyers, and for the price bands above R5m where an increase in sales volumes can generate significantly more income for the economy and fiscus.
“You have to sell many more homes at R1m to generate the direct and indirect economic benefits that a R10m or R20m-plus sale does,” he says.