Reviving the Construction Industry and Property Markets

Getting South Africa’s construction industry and residential and commercial property markets out of the doldrums requires a holistic approach, including privatesector participation and a willingness by government to change policies. Small interest rate cuts will not have an impact. It is about the bigger macroenvironment and getting general economic management right. This was the contention of FNB economist John Loos, who at the recent inaugural Residential Investment & Development Conference in Sandton, Johannesburg 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 such as bailing out Eskom, SAA and the Post Office, and SA’s fiscal situation deteriorates, a government which becomes open to changing its policies, along with a welldeveloped, capable, welldiversified private sector ready to deliver goods and services, offers hope. “Our private sector’s already responding swiftly to putting in electricity solutions as fast as it’s allowed to. 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 it to ensure that they happen,” said Loos. He added that densification was critical to address SA’s housing backlog, particularly as land became scarcer, which was already a challenge in the Western Cape.

He recommended that the abundance of office space be repurposed for residential use and stressed that improved urban planning was crucial. “Apartheidera large dormitory towns are INDUSTRY NEWS resulting in high transport costs for the poor. To reduce the costs of property, we must reduce transport costs,” he said. The solution, he stated, lay in strategic zoning and densification along road transport corridors, including bus routes. Demand for public transport would be created along highdensity corridors and this would lead to a more viable public transport system.

South Africans spending less on transport might have more to spend on property. The inaugural Residential Investment & Development Conference was hosted by SmartXchange a division of Commerce Edge SA and was launched in response to the country’s massive housing shortage and high urbanisation rate, with the support of numerous event partners, including the Association of Residential Communities, Consulting Engineers SA, the Housing Development Agency, the National Association of Building Inspectors of SA, the National

DEMAND FOR PUBLIC TRANSPORT WOULD BE CREATED ALONG HIGH DENSITY CORRIDORS AND THIS WOULD LEAD TO A MORE VIABLE PUBLIC TRANSPORT SYSTEM.

Association of Social Housing, the National Home Builders’ Registration Council, the National Housing Finance Corporation, the Property Sector Charter Council, the Property Practitioners’ Regulatory Authority, the SA REIT Association, the SA Association of Consulting Professional Planners and the SA Local Government Association, among others.

Reviving the Construction Industry and Property Markets

Leave a Reply Cancel reply