Property market's response to budget speech 3.0
'While I welcome the fact that we avoided a VAT increase, this budget does signal some underlying challenges that could temper market momentum. One of the most sobering updates in this re-tabled budget is the revised GDP forecast of just 1.4% for 2025, down from the earlier projection of 1.9%. This weakened outlook inevitably affects consumer confidence and employment prospects – two essential drivers of real estate demand,' he notes.
Another downside is the proposed fuel tax increases which will go towards the shortfall left by the cancelled VAT hike. 'Although this measure is more targeted than a blanket VAT increase, it still filters through to household budgets. Rising fuel costs increase the cost of transport, food, and services – all of which erode disposable income. This means less room in the budget for mortgage payments, maintenance, or savings for a deposit and / or transfer costs,' says Goslett.
Apart from these factors, Goslett is also concerned about the scaling down of modernization funds for Home Affairs. 'This could have very real implications for the property market. Home Affairs plays a pivotal role in property transactions. Delays or inefficiencies in this department can slow down transactions, frustrate cross-border investment, and erode confidence in the ease of doing business in South Africa. Modernizing Home Affairs is not just a tech upgrade – it's a vital component of making our property and financial systems more agile and trustworthy,' he notes.
Despite these concerns, Goslett wants to acknowledge the effort made by National Treasury to present a measured and politically workable budget. 'The property sector thrives on policy certainty, consumer confidence, and economic momentum. Budget 3.0 offers some of that – but the warning signs in the macroeconomic data remind us that we're not out of the woods yet,' he states.
'For our industry to flourish, we need to go beyond avoiding harm. We must create the conditions that enable more South Africans to become homeowners. That means continued infrastructure investment, service delivery improvements, financial sector confidence, and administrative efficiency. This new budget offers some hope in this regard, but I will be watching closely over the coming months to see how these fiscal plans are implemented,' says Goslett.
Looking beyond our borders, Goslett also remains hopeful that the upcoming meeting between President Cyril Ramaphosa and U.S. President Donald Trump will bear positive fruit. 'Strengthening diplomatic and economic ties with major global players is crucial for positioning South Africa on a better growth trajectory. If this engagement leads to enhanced trade relations, investment flows, or renewed confidence in our economy, it could serve as a much-needed boost — not only to the broader economic outlook but also to sectors like real estate that are so closely tied to investor sentiment and stability,' he concludes.
Issued by: Kayla Ferguson
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