Latest news with #NationalBudgetSpeech
IOL News
27-05-2025
- Business
- IOL News
No VAT increase – But are you still paying more?
Discover how South Africa's 2025 budget, while avoiding a VAT increase, introduces hidden costs that could impact your household finances. After two failed attempts and weeks of political wrangling, Finance Minister Enoch Godongwana finally delivered the third iteration of the 2025 National Budget Speech on Wednesday, 21 May. While many South Africans breathed a sigh of relief at the announcement that the proposed VAT increase had officially been scrapped, the true cost of this budget might not be as comforting as it seems. Consumers should look beyond the headlines. No VAT increase sounds like a win, but when you dig deeper into the numbers, the financial strain on households is still very real. Hidden Costs Behind the Relief Although VAT will remain at 15%—a move that Minister Godongwana says reflects the government's commitment to listening to the public—the budget makes up for lost revenue in less obvious ways. These include:
IOL News
19-05-2025
- Business
- IOL News
House prices rise slightly despite declining property sales in first quarter of 2025
Ilitha Park in Khayelitsha experienced a rise in property prices as demand for properties in the area surge. Image: Leon Lestrade While the volume of property sales decreased overall in the first quarter of this year, house prices still strengthened slightly. This is according to the REMAX National Housing Report Q1 2025 released on Monday which showed that the first quarter of 2025 produced a mixed bag of results. Referring to national deeds office information, in terms of units sold, the South African market was said to be down by roughly 8%. Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, said this is not necessarily cause for concern and can be attributed to a few factors. 'Firstly, the timing of the annual National Budget Speech often introduces a degree of uncertainty into the market, as potential buyers adopt a cautious 'wait and see' approach in anticipation of changes to taxes, subsidies, or economic policy. "In Q1 2025, this effect was compounded by ongoing geopolitical tensions and global economic instability, which influenced inflation and overall consumer confidence,' Goslett said. Additionally, Goslett highlighted that seasonal trends have historically contributed to lower transaction volumes in the first quarter. 'January is a shorter working month due to the holiday period, and December typically includes a closure of the Deeds Office, which causes a backlog in property registrations and delays in processing. "These cyclical administrative slowdowns and reduced operational days mean that Q1 is often the quietest quarter for property transfers,' he said. Despite this, the RE/MAX SA network's registered sales grew by 6.93% in Q1 2025, while the brand's reported sales grew by a staggering 10.51%. The average days until marked as sold on for Q1 2025 was just 17.1 days. 'These results demonstrate the strength of our brand and the hard work of our network, especially in a market that is showing signs of overall decline,' Goslett said. Looking at the provincial and suburb trends, the top 5 most searched suburbs on were Parklands (Western Cape), Westville (KwaZulu-Natal), Bluff(KZN), Summerstrand (Eastern Cape) and Table View (WC). The regional director and CEO said house price growth in the Western Cape has been among the most robust in the country over recent years, driven by strong demand, perceived lifestyle advantages, and relatively stable municipal governance. 'However, this sustained price escalation appears to be having a dampening effect on demand,' Goslett said. For the first time in a while, the Western Cape no longer dominates the entire Top 5 list of most searched suburbs on with only Parklands and Table View making the cut. Suburbs in KwaZulu-Natal (Westville and Bluff) and the Eastern Cape (Summerstrand) have now edged into the spotlight, suggesting that prospective buyers may be broadening their searches to more affordable coastal alternatives. This shift was said to likely signal a price resistance threshold being reached in the Western Cape, where affordability concerns are starting to outweigh the province's lifestyle appeal for many middle-class buyers. 'As price sensitivity increases, buyers are turning to regions where they can still enjoy coastal living without the premium price tag, potentially redistributing demand more evenly across provinces,' says Goslett. There are also signs that some might even make the move back to Gauteng. The province's proportional contribution to the RE/MAX SA brand increased from 37% of all units sold in Q1 2024 to 39% of all units sold in Q1 2025. 'From an investment perspective, Gauteng remains South Africa's economic powerhouse, generating the highest provincial GDP. Ongoing infrastructure projects and urban regeneration efforts in key areas, such as Sandton, Rosebank, and parts of Pretoria, signal long-term capital growth prospects. "For savvy investors, Gauteng presents an opportunity to purchase properties at relatively lower entry points, while still benefiting from high rental demand and gradual capital appreciation, particularly as more buyers shift their focus away from overheated markets in the coastal provinces,' Goslett said. He said that while seasonal lulls and macroeconomic uncertainty dampened overall transaction volumes, the resilience of RE/MAX SA's network, coupled with regional shifts in buyer interest, signalled that opportunity still abounds for those who remain informed and proactive. In the latest FNB Property Market Report, Siphamandla Mkhwanazi, FNB senior economist, said the recent dip in consumer confidence due to heightened global and domestic uncertainty is likely to disproportionately impact the affluent segments, potentially leading to slower sales and price stagnation. He said that in the lower-priced segments, potential interest rate cuts by the South African Reserve Bank (SARB) and a potential 10% increase in the transfer duty threshold could stimulate demand. These factors suggest a potential shift in demand towards more affordable housing options amid increased uncertainty, he said. Independent Media Property
Zawya
28-03-2025
- Business
- Zawya
How the South Africa consumer class cuts costs?
When Finance Minister Enoch Godongwana delivered the 2025 National Budget Speech on 12 March, the nation wondered if the GNU was really taking the country's cost of living crisis by the horns and wrestling it to the ground. Concerns about the impacts of the value-added tax (VAT) increases over the next two years, rising costs of debt servicing and the lack of decisive strategies to tackle rising consumer costs have risen out of the dust. Brandon de Kock, director of storytelling at BrandMapp says, 'By the fourth quarter of last year, South Africa's consumer confidence index was at -6 points. It's not the worst it's ever been, -36 points in 1985, and far from the best at 26 points in 2018. But it's a notable recovery from the recent pandemic lows which fell to -33 points in 2020. Take a step back and it looks to be a clear indication of the resilience of South Africa's consumer class who have quite a few tools at their disposal to deal with the rollercoaster of life.' Shifting demographics in the consumer class The latest BrandMapp survey, which tracks the behaviours and sentiments of South Africans living in household with disposable incomes, from R10k a month to the millionaire class, provides insights into how the consumer class (which they define as those adults who can freely buy goods and services above their basic survival needs) are financially managing their households. Despite the sluggish economy and the cost-of-living crisis, De Kock says, 'The important context to bear in mind here is that according to the latest National Treasury data, the consumer class in South Africa grew at about 7.5% last year, which means it outpaced inflation.' 'However, the growth of the consumer class is not spread evenly across the different income brackets. If you divide the personal income earners of SA into the core consumer class earning R10k to R30k per month, the Top Enders earning R30K to R80K and the Millionaires earning R80K or more you start to see some interesting shifts. The core represented 56% of all taxpayers back in 2020, but now it only represents 46%. It means there's a significant rise in the Top End with more than half of the consumer class, 54% now sitting in the R30k to millionaire income brackets. While this is obviously not great for the country's gini coefficient, it appears that while the rich are getting richer, the number of people earning relatively high incomes, living aspirational lives and driving potential growth seems to be increasing at an equally rapid rate.' What costs are the SA consumer class cutting? When it comes to strategies to deal with the rising cost of living, BrandMapp shows that there's not much difference between mid-income and top-end earners, the exception being that middle income earners are 50% more likely to be considering getting a second job. Around a fifth of the consumer class are thinking of cancelling Dstv, spending less on alcohol and their mobile data packages, while less than 10% are thinking about cancelling some insurance and downgrading their medical aid. De Kock says, 'What's interesting is to see that some of the habits we learned during the pandemic are hanging around like long-Covid. 35% of the consumer class are considering cutting back on clothing budgets and 31% say they are likely to go out less to the movies and restaurants. All-in-all, with home grocery delivery, meals-on-wheels and streaming services, a mid-to top-income South African home is a comfortable place to be, and we have learnt that staying home more in our trackie pants is a relevant cost-saving strategy.' GENERIC: Does the province you live in shape your cost-saving strategies? If you live in Gauteng, you're more likely to deal with rising costs by working more with 28% of the consumer class in the province saying they are open to taking on a second job. By comparison, a side-hustle is only attractive to 23% of KwaZulu-Natal respondents and 21% of those in the Western Cape. Gauteng consumers are also more likely to cancel Dstv and cut back on alcohol. However, their enthusiasm wanes when it comes to going out less to movies and restaurants (31%) or staying home for the holidays (16%). By contrast, these are top strategies for Western Cape consumers with 36% content to go out less and 19% considering staying home for the holidays – perhaps, it helps to live in the country's top tourism region. The top three cost-saving strategies for KwaZulu-Natal are 28% considering going out less to movies and restaurants, 23% getting a second job and 19% cancelling Dstv. How will the different generations stretch their budgets? Not surprisingly, South Africa's well-heeled boomers are the least likely to be thinking about any cost-saving measures, and at the other end of the scale, Gen Z and Millennials are the most open to a wide range of ways to cut their expenses. De Kock says, 'What we see is that going out less to movies and restaurants, staying home more and cutting back on clothing budgets are major strategies across all generations, which mirrors our Covid cost-cutting habits. Millennials are the most likely to cut back on alcohol (24%), get a second job (30%) and spend less on clothing (38%), while Gen Xers are mostly likely to withdraw from their pensions (11%) and cancel Dstv (24%). 36% of Gen Z are hoping that going out less to movies and restaurants will help get them through the month, and 29% are considering staying home more. 28% are thinking about changing where they shop to find the best prices.' The cost-cutting gender divide – clothes and alcohol De Kock says, 'There's an interesting story in the differences between the ways that women and men are approaching the cost-of-living crisis. Women are 50% more likely than men to consider cutting their clothing budgets and changing where they shop for groceries. In a switch around, men are 50% more likely than women to be thinking of cutting back on alcohol and withdrawing funds from their home loans. Women are also more likely to be looking for a second job than men, and more willing to clean their own house.' In the end, lower prices win the day For retailers and brands wanting to meet the South African consumer in the moment, it's crucial to grasp how important pricing and promotions are across the mid- to top-earning households. 'When we ask them about general shopping habits, 58% of South Africa's consumer class say that they always look out for sales and discounts,' concludes De Kock. '34% say that the lowest price is the top factor when choosing where they shop – more important than convenience, quality and value. The youngest consumers are most hooked on the lowest price with 39% choosing a store on this basis.' Visit for an overview of what's in the new data.
Zawya
21-03-2025
- Business
- Zawya
South Africa's VAT hike and the rising cost of education: Why alternative schooling remains an affordable option?
The 2024 National Budget Speech has confirmed a phased increase in VAT from 15% to 16%, marking the first hike since 2018. The increase will be implemented in two stages: 0.5% on 1 May 2025, and another 0.5% on 1 April 2026. While increased spending on education is necessary, many South African families are already feeling the strain of rising costs. School fees, transportation, uniforms, and additional expenses continue to put financial pressure on parents. As costs rise, many families are looking for alternative education models that offer high-quality learning at a more affordable price. Home and online schooling: A cost-effective solution With household budgets tightening, home and online schooling are becoming attractive alternatives to traditional brick-and-mortar schools. By removing costs such as transportation, uniforms, and school fund contributions, parents can allocate their education budgets more efficiently. 'Parents are increasingly looking for ways to ensure their children receive a quality education without the financial strain,' says Louise Schoonwinkel, MD at Optimi Schooling, of which Impaq is a registered trademark. 'Home and online schooling provide a structured, CAPS-aligned education at a more predictable and often lower cost compared to traditional schooling, especially when considering the additional expenses that come with mainstream schools.' How homeschooling helps families save - No transport costs: Many learners travel long distances to school, adding to monthly expenses. Home and online schooling eliminate this cost entirely. - Reduced uniform and school fund expenses: Many schools require multiple uniforms, sports kits, and contributions to various school funds. Home learners can avoid many of these costs. - Lower monthly tuition fees: Some private and top-end public schools come with high tuition fees that increase annually. Impaq's home and online schooling solutions offer structured education at competitive, more manageable rates. - Customised learning resources: Parents have the flexibility to choose learning materials that suit their budget rather than paying for compulsory school resources. Education without compromise Despite being a more affordable option, home and online schooling do not compromise on quality. Learners follow the CAPS curriculum, receive structured support, and can transition to traditional schooling or higher education with ease. 'Families should not have to choose between affordability and quality education,' adds Schoonwinkel. 'With the right support, alternative education models provide the same academic outcomes while giving parents control over their education spending.' Final thoughts As the VAT increase takes effect in the coming years, parents will need to make strategic financial decisions about their children's education. Home and online schooling remain viable, cost-effective alternatives that provide the flexibility, structure, and quality education that families need in a changing economic landscape. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
Zawya
06-03-2025
- Business
- Zawya
Will South African SMEs find relief in the upcoming budget?
After a strong start to the year, new challenges have emerged in recent weeks, posing risks for both SMEs and the broader economy. These include the return of loadshedding and a potential fuel price hike in March, though diesel prices may see a slight decrease. We're also seeing the souring of US-SA relations, which is a worrying development. More generally, South Africa will feel the pain of the global trade war that is unfolding under US President Donald Trump's administration. At home, the last-minute postponement of the National Budget Speech has created concern and uncertainty about the future of the GNU, although President Cyril Ramaphosa has reassured South Africans that 'such differences don't mean that the GNU is in crisis. It means that democracy is working.' Here Miguel da Silva, group executive of business banking at TymeBank, considers some of the things that SMEs are hoping to hear in the Budget Speech (rescheduled for 12 March), and highlights other aspects that need to be top of mind, now and in the months ahead. The revised budget: what will the minister do for SMEs this time? While South Africa needs to raise more money to finance its long list of urgent needs, it has already been made clear that increased borrowing is not an option. Now that the controversial 2% VAT increase is no longer on the table, there is talk of a 0.75% increase instead. Regardless, the finance minister will have to find other ways to fund the revenue shortfall. VAT aside, increasing personal and company taxes is one way to do this. The issue, however, is that South African taxpayers are already taxed to the hilt. According to South African Revenue Services' 2024 tax statistics report, 2.6% of South Africa's citizens pay 76.2% of all personal tax. When it comes to company tax, approximately 1 000 companies pay 72.3% of all the tax collected. So how will the government balance its books? Some analysts expect this to come from an increase in so-called 'sin taxes' as well as additional taxes on luxury items, and it is understood that a wealth tax is also being considered. Cutting back on expenditure is a likely scenario. Let us hope that whatever budget cuts are being considered, there will be some money allocated to SME support – after all, SMEs' increased participation in the economy will boost tax revenue while creating much needed jobs. An increased allocation of the national budget towards infrastructure development would also be a welcome development for SMEs, given the opportunities that could emerge in the sub-contracting space. Government must reduce regulatory burdens and increase funding access for SMEs to grow Red tape has long been a major obstacle for SMEs. There are multiple independent initiatives that seek to address this and other issues. This includes the proposed Startup Act that SiMODisa, a powerful industry-led initiative, has been lobbying for in its effort to overcome the barriers that SMEs and startups face, including access to capital, access to markets, access to talent and the lack of supportive enabling environments. There is also the proposed R100bn Transformation Fund, an initiative aimed at supporting black-owned businesses and SMMEs. It is envisaged that the government-led initiative, which has attracted widespread criticism, will be funded through private sector profits. Since the plan is still being developed and has yet to be made available for public comment, it will be interesting to see whether it is mentioned in the upcoming budget speech. While any initiative aimed at supporting SMMEs is welcomed, it remains to be seen whether the Transformation Fund in its final form will deliver the intended benefits. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
