Getting South Africa’s construction industry and residential and commercial property markets out of the doldrums requires a holistic approach, including private sector participation and a willingness by Government to change policies. Small interest rates cuts will not have an impact. It is about the bigger macro environment and getting general economic management right.
This is the contention of First National Bank economist John Loos. Speaking at the inaugural Residential Investment & Development Conference in Sandton, Johannesburg, Loos urged businesses to engage with Government at a high level to address the stagnation of the economy and the property market. While housing budgets are being “crowded out” by issues like bailing out Eskom, South African Airways and the Post Office, and South Africa’s fiscal situation is getting worse, it was wishful thinking that Government could provide some sort of stimulus to construction or housing, Loos stated. He asserted, however, that with a Government that is now open to changing its policies, and a well-developed, capable, well-diversified private sector ready deliver goods and services, there was hope.
“Our private sector is already responding swiftly to putting in electricity solutions as fast as it is allowed to. The Government needs to accelerate this and enable the private sector to deliver other goods and services. Government’s role must be that of the regulator. The private sector needs to impress upon Government what changes must take place, and work with them to ensure that they happen.”
Loos also told Residential Investment & Development Conference delegates that densification is critical to address South Africa’s housing backlog, particularly as land becomes scarcer, which is already a challenge in the Western Cape. He recommended that the abundance of office space should be repurposed for residential use and stressed that improved urban planning is crucial. “Apartheid-era large dormitory towns are resulting in high transport costs for the poor. To reduce the costs of property, we must reduce transport costs,” Loos said. He believes that the solution lies in strategic zoning and densification along road transport corridors, including bus routes. Demand for public transport would be created along high-density corridors and this would lead to a more viable public transport system. South Africans spending less on transport may have more to spend on property.
The inaugural Residential Investment & Development Conference has been commended by property sector leaders and stakeholders. “This event was a resounding success and a remarkable gathering of professionals,” commented Mahadi Buthelezi, group chief executive officer of the RB Property Group and Women Economic Assembly (WECONA) Property Sector lead.
“This important conference not only provided an opportunity for networking but also showcased the strides being made in the property sector. It was inspiring to witness the collective commitment to building a brighter future and to see the potential for transformative collaborations. I am confident that the success of this conference marks the beginning of an exciting journey. Together, we can forge a path towards a thriving property industry. Looking ahead, it would be highly beneficial to have increased participation from relevant government departments in future conferences,” Buthelezi said. She noted that their involvement would enhance the discussions and foster the much-needed collaborative efforts to drive positive change in the industry.
The 2023 Residential Investment & Development Conference was hosted by SmartXchange (a division of Commerce Edge South Africa). It was launched in response to the country’s massive housing shortage and high urbanisation rate, with the support of the following event partners:
Association of Residential Communities (ARC)
Black Business Council in the Built Environment (BBCBE)
Community Schemes Ombud Service (CSOS)
Consulting Engineers South Africa (CESA)
The Housing Development Agency (HDA)
The National Association of Building Inspectors of South Africa (NABISA)
The National Association of Social Housing (NASHO)
National Home Builders Registration Council (NHBRC)
National Housing Finance Corporation SOC LTD (NHFC)
Private Student Housing Association (PSHA)
Property Sector Charter Council
Property Practitioners Regulatory Authority (PPRA)
SA REIT Association
Social Housing Regulatory Authority (SHRA)
South African Association of Consulting Professional Planners (SAACPP)
South African Institute of Black Property Practitioners (SAIBPP)
South African Institute of Architects (SAIA)
South African Local Government Association (SALGA)
The Association of South African Quantity Surveyors (ASAQS)
The Banking Association of South Africa (BASA)
The South African Women Lawyers Association (SAWLA)
The Women’s Economic Assembly (WECONA)