Lew Geffen, chairman of Sotheby's International Realty in SA, says: "Today's Budget holds out excellent prospects for the speedy improvement of the real estate market and the sustainability of that recovery.
"The most important macro aspects include Finance Minister Pravin Gordhan's strong stance, re-iterated throughout his speech, against corruption and financial mismanagement which, together with the fact that he has managed to contain the expected Budget deficit this year to 4,4%, will undoubtedly boost the investor confidence that is the lifeblood of the economy - and of the property sector.
"Also critically important are the R845bn allocation to various new infrastructure projects and the increased spending on existing public works, community works, and rural development programmes, as these are set not only to create thousands of new jobs - and new home buyers - but to raise the management capacity of SA." Of more immediate benefit, he says, will be the new housing subsidy scheme to be implemented through the provincial administations, which will see those who earn between R3500 and R15 000 a month able to access subsidies of up to R85 000. "This will give the lower end of the market much needed impetus and no doubt have a positive knock-on effect."
Rudi Botha, CEO of SA's largest bond originator BetterBond, says: "We could hardly have wished for a better Budget, not only to further stimulate housing demand, but also to increase the ability of home seekers to qualify for housing finance.
"By allocating billions of rands to new infrastructure projects as well as R6,2bn specifically to job creation projects and incentives, Finance Minister Pravin Gordhan has demonstrated the government's absolute determination to increase employment, which will not only broad the tax base and improve the country's overall economic prospects, but significantly raise the number of people able to contemplate home ownership in the next few years.
"This should also bring about a revival in the residential construction industry, which itself has the capacity to be a major employer, and thereby create a virtuous circle." At the same time, he says, Mr Gordhan has managed to find R9,5bn worth of immediate relief for individual taxpayers and significantly reduce the tax and administrative burden on small / micro businesses to help offset the increased costs they will incur from the increased fuel levy and higher electricity tariffs this year.
"Most importantly, though, the Minister indicated today that government is now preparing to play an active role in getting individuals to save more. For most prospective buyers, the biggest limiting factor in gaining access to mortgage funding at the moment is the lack of a deposit. This relates directly to SA's poor savings culture, but this could change radically if the government goes ahead with plans to push for the introduction of new tax-free savings and investment products, and to directly incentivise taxpayer savings.
"Meanwhile, the confirmation of the new "gap market" housing subsidy will be a great relief to those who have for too long earned too much to qualify for RDP housing and too little to qualify for home loans. Our only disappointment was the lack of any detail in the Budget about the proposed national mortgage insurance scheme."
Young Carr, CEO of Aida National Franchises, says today's Budget makes it clear that government wants to encourage individual property ownership - and to make this possible across as much of the economic spectrum as possible.
"This will begin with the implementation of the new housing subsidy scheme to provide prospective buyers earning between R3500 and R15 000 a month with subsidies of up to R85 000 and enable them to access mortgage finance for properties priced at up to R300 000.
"Then there is the proposed mortgage support scheme, which Finance Minister Pravin Gordahn confirmed is under consideration and is expected by the banks and others in the real estate industry to come into operation later this year. It is expected to make mortgage finance more readily accessible to first-time buyers and others in the low-income or small house sector for up to about R600 000.
"And thirdly, the Minister announced significant changes today to the rate at which Capital Gains Tax will be charged, from 50% to 66% on properties owned by trusts and other legal entities and from 25% to 33% for properties owned by individuals. This is further evidence of the fact that government wants to see residential properties mostly owned by individuals - as we saw with the recent granting of an extended transfer duty exemption for those willing to transfer their properties out of CCs, companies and trusts and into their own names. It is also underlined by the fact that the threshold at which CGT becomes applicable on primary residences has now been raised from R1,5m to R2m.
"In the longer term, he says, home ownership will of course also be fuelled by the massive R845bn investment in infrastructure projects over the next three years, the government's much-sharpened focus on job creation and education, and the plans to root out corruption and money wastage, especially as it applies to home building, land restitution and the improvement of urban and rural living environments.
"Overall, we are also very encouraged, from a property point of view, by the largely positive financial position in which SA finds itself, in contrast to the situation in many more developed countries as well as the other developing nations. Now if the country can unlock its resources and reserves of talent through the development of its infrastructure and people as envisoned in today's Budget, there will undoubtedly be a very strong increase in home ownership - and individual wealth creation."
Berry Everitt, MD of the Chas Everitt International property group, says: "We must applaud the sentiment expressed by Finance Minister Pravin Gordhan today as he paraphrased JF Kennedys' famous "Ask not what your country can do for you, but what you can do for your country" quote in his Budget preamble.
"We believe, as he does, that our economy not only needs to grow faster and provide more jobs, but urgently needs to become more inclusive - and that this Budget, if it can be carried through, will be the start of something really big for this country and thus for our local property market."
"The most striking aspects, of course, are the huge allocations for infrastructure including the improvement of the rail and road networks and the development of new harbours, dams and energy projects, for direct job creation and for educational facilities as well as enhanced skills development and training. These are things that we all need if we are to create a rapidly growing economy able to attract direct foreign investment and become the true gateway to Africa.
"Also very reassuring, he says, are the Minister's carefully laid plans to see that the procurement procedures for these massive new projects are absolutely above board - and his declaration that where corruption, underspending or slack financial controls is uncovered now, at any level of government, corrective action will be taken and the officials responsible held accountable.
"However, we should also not lose sight of the considerable detail in this Budget, much of which is specifically positive for the property market. Examples are the new housing subsidy scheme for individuals earning between R3500 and R15 000 a month, the proposed tax relief for housing developers and employers who provide low-income housing, the substantial allocations to provide better services to informal housing settlements, and further incentives to encourage energy efficiency at the household level.
"We also applaud the new Cities Support Programme intended to improve and integrate the planning and management of transport networks, municipal services and the built environment in our eight major metros is very good news, as property is as much about how we live as about where." There is however also a negative detail, he says, which is the increase in the rate of Capital Gains Tax, from 50% to 66% for property-owning legal entities such as trusts, and from 25% to 33% for individuals, which will give people pause when it comes to buying second properties.
"it is important to note, however, that the threshhold at which CGT becomes applicable on primary residences has been raised from R1,5m to R2m."
Jan Davel, MD of the RealNet estate agency group, says: "It is clear from today's Budget that Finance Minister Pravin Gordhan is committed to keeping SA's economy in the fighting trim which has enabled it to withstand the global economic storms of the past few years, and this bodes very well indeed for the country's real estate industry.
"Although he acknowledged during his speech that the ongoing economic crisis in Europe had forced him to cut his economic growth forecast for this year from 3,4% to 2,7%, the Minister also made the point that advanced economies were only expected to achieve growth of 1,3% this year, and the much vaunted Asian region overall growth of just 7%. At the same time, it is important to note that while many other countries are battling huge deficits, SA's deficit this year will amount to just 4,6% of GDP, well below the 5,4% projects by economists."
Davel also says Mr Gordhan's obvious determination to combat corruption and control spending in the public sector while directing resources into much-needed infrastructure, training and capacity development will not only boost local taxpayers' confidence, but encourage large scale private sector investment and further job creation.
"And this is where the real benefits will lie for the real estate industry, as we will then have a growing pool of better qualified, higher paid individuals who are able to afford their own homes. What is more, those people will be living in a country where total public debt is under 40% of output - a level that more developed countries would love to achieve."
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