Harcourts South Africa 2018 Budget Reaction

Feb 22, 2018 11:03:09 PM Share this:

Overall it was a far more balanced budget speech than initially expected, with a focus on rebuilding, which is in line with the newly elected President Cyril Ramaphosa's messaging. However, Finance Minister Gigaba's announcement that there will be an increase in VAT from 14% to 15%, the first time VAT has been increased since 1993, will undoubtedly have a direct impact on the property market. VAT is payable on the transaction of a home purchase and in some cases included in the price of the home. Although one percent seems like a very slight increase, transactions like high value commercial properties or development investments might feel the increase far more than that of the middle to lower end of the market.

There is no doubt Government is experiencing shortfalls in their budget and lending might tighten up, therefore accumulation of funds has to originate from taxes. South Africans experiencing a price pinch with rising food costs, fuel costs and tax hikes might continue to be under financial pressure as more increases can be expected. This was noted in the speech as a 22c/litre increase in the general fuel levy, and a 30c/litre rise in the Road Accident Fund (RAF) levy was announced. South Africans will also be paying 52 cents more per litre for fuel from April 4. The effect of these tax hikes impacts the man on the street in a direct manner, and this might have an effect on the rental market on the lower end.

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Topics: Richard Gray, Harcourts South Africa, 2018 budget, Cyril Ramaphosa, economical news

Green' homes demand set to increase in 2018

Feb 22, 2018 6:37:49 PM Share this:

There has been a significant appreciation for sustainable living in South Africa over the past few months as a major global city faces serious water challenges. The support by the private sector and residents has shown the dedication we as people have to the sustainability of our communities and families. The dire situation in Cape Town, which now has all hands on deck to avoid 'Day Zero' has showcased the demand for homes that are geared toward environmental preservation.

The global shift toward building green economies will continue to be a hot topic in 2018 and years to come. As we as societies start embracing the need for change in other aspects of our lives the importance of ensuring our foundation, our homes, are aligned with these practices will become more frequent. We see the evolution of new developments, residential and commercial building as well as home renovations changing the landscape of these industries. One such example was last year's Nedbank Corporate and Investment Banking (NCIB) first disbursement from an innovative R120 million Sustainable Affordable Housing finance facility that was put in place through the collaborative efforts of Nedbank’s Affordable Housing Development Finance division, and South Africa’s Green Fund.

In the affordable and low-cost housing segments we've already seen a major push by government to incorporate solar installations to homes. This obviously also is an attempt to reduce demand from the electricity grid which we've known has experienced difficulty in recent years.

There has certainly been an increase in demand for 'green' homes by first-time buyers. Our understanding implies that our younger audience have a greater desire to live sustainable lives and that paired with this innate need is affordability.  In a country where consumers often experience a price pinch between increased rates, input costs and expenses versus income, saving on home expenses can relieve a lot of pressure.

For South African property owners, the experience of power outages, environmental threats and escalating electricity tariffs make green solutions such as solar power a practical consideration. Although greening a building – whether building new or renovating – can be expensive, the savings in future operational costs invariably make the initial investment worthwhile.

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Topics: Richard Gray, Harcourts South Africa, Enviromental Concerns, Green Buildings, Solar Power, economical news