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Thursday Feb 24, 2022

Budget speech reaction: property sector, Joff van Reenen

Expert real estate Lead Auctioneer and High Street Auctions Director Joff van Reenen says the Finance Minister's anxiety in his 2022 Budget Speech about South Africa's debt burden of R4.3 trillion is right on the money.

"Business confidence here and abroad will no doubt be buoyed by the news that our revenue collection overrun of R182 billion is in part going towards stabilising the country's debt position, allowing us to reduce our debt borrowing for the first time in seven years.

"That abundance also allowed for a veritable feast of ‘good news' tax announcements for both households and corporates – everything from no fuel levy increase to no rise in personal tax rates, and in fact the 1% drop in corporate tax mentioned last year is definitely going to be implemented. All in all, South Africans are looking at more than R5.2 billion in tax relief to help support the economic recovery, according to the Minister.

"That said, though, until South Africa is spending significantly less than the current 20c of every rand of government revenue to service its ever-growing multi-trillion rand debt burden, we'll have odd days of sunshine but we won't have sustainable and equitable economic growth.

"Property investment in South Africa is currently bullish with record sales last year in several areas, but to maintain this long term the country needs economic development and a government that shows strong fiscal leadership. Today's Budget Speech was a step in the right direction, but it remains to be seen whether government will be able to walk its talk."


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