Supplementary budget response

02 July 2020

Berry Everitt, CEO of the Chas Everitt International property group, says that following the Supplementary Budget tabled by Finance Minister Tito Mboweni today, there are indications that interest rates will be lowered again next month or in September, to stimulate household and business spending and boost economic activity.

This will be positive for homebuyers and property investors, because it will make it even easier to qualify for home loans.

Home prices are also declining as expected, so the market over the next few months will present the best purchase opportunities seen in more than a decade.

"What is more, while unemployment is rampant due to the many business closures brought about by the COVID-19 lockdown, there are certain sectors that are doing well and where employment prospects are good, such as food handling, transport, logistics and all the essential services. Consequently, we expect home sales to increase, and to generate a positive spinoff for the economy by the end of this financial year."

Meanwhile, he says, the Minister's decision to move the country towards zero-based budgeting is to be welcomed. "This suggests a real determination to cut government expenditure and scrap non-essential projects, while focusing our much-reduced resources on building up our infrastructure and creating millions of new jobs so that we can increase our tax revenue and steadily reduce our national debt, while still supporting better education, health and security for everyone.

"We are also in support of immediate reallocation of funds to local authorities to provide better services and thus upgrade the living conditions of many residents, and the commitment to more sustainable energy options.

"However, we would have liked to see more direct support for existing property owners at this time, perhaps in the form of a tax reduction that would help those who are struggling to hang on to their homes, or could be used by landlords to offset some of the rent that many have lost due to the lockdown."

Article published courtesy of Private Property

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