Economic recovery interventions present hope
ENGINEERING NEWS / 31 JULY 2020 - 16.55 / DARREN PARKER
South African Institute of Black Property Practitioners (SAIBPP) CEO Vuyiswa Mutshekwane says it is encouraging to already see a number of the proposals being put into practice from the SAIBPP’s 10-point plan to catalyse economic development and drive the post-lockdown economic recovery.
The SAIBPP published the comprehensive 10-point plan in May – available on the SAIBPP website – calling for urgent national and local government interventions to ensure that the South African property sector survives.
VUYISWA MUTSHEKWANE It is not business as usual and things are unlikely to return to normal anytime soon
Mutshekwane says one of the most notable points of the plan being put into practice is that infrastructure development and investment now form part of government’s immediate post-Covid-19 economic stimulus programme, with more than 260 shovel-ready projects being identified in an announcement at the Sustainable Infrastructure Development Symposium South Africa last month.
Human Settlements Minister Lindiwe Sisulu also recently announced that the establishment of the Human Settlements Development Bank is in its final stages after a seven-year incubation period.
“This is a significant step in the right direction and should result in more efficient delivery of housing and the fast-tracking of property ownership among those who have previously not been afforded the opportunity to own property,” Mutshekwane tells Engineering News.
Moreover, one of SAIBPP’s recommendations was for the taxi industry to receive a subsidy. This recommendation has now been adopted. In addition, significant interest rate cuts have also resulted in an immediate stimulus to the economy, which Mutshekwane says is evidenced by the 20% to 30% spike in bond applications since the easing of the lockdown – largely driven by first-time buyers.
“Although about 60% of the recommendations have been adopted or are being implemented, there is still much to be done.”
Mutshekwane adds that an ongoing challenge is the lack of alignment between business and government, as well as the disaggregation and disjointed decision-making structures across all arms of State.
“Swift, impactful change requires us to be rowing in the same direction which, I suppose, is the ultimate test of leadership.”
The SAIBPP believes that the post-Covid-19 new economic vision that is currently being crafted should focus on reducing income inequality, increasing asset ownership to allow for increased financial inclusion and aggressively addressing the legacy of apartheid spatial planning. This is to be done through the implementation of inclusionary housing policies and increased investment in townships and previously underserved areas.
Mutshekwane confirms that the property sector is experiencing massive shifts, owing to its being under significant pressure.
“It is not business as usual and things are unlikely to return to normal anytime soon. This presents exciting opportunities for diversification and innovation within the sector, which will be driven by the new entrants and entrepreneurs in the market,” she says.
Mutshekwane notes that crowd funding and collective investment schemes present a significant opportunity to broaden black ownership through fractional ownership schemes.
“Financial technology platforms that enable this type of investing are already picking up speed and there is much opportunity for smaller players to raise capital through these types of schemes.”
Mutshekwane adds that township and rural retail, as well as residential property in the low- to middle-income segments, have demonstrated their robustness, even amid the current economic challenges.
She believes this robustness will naturally lend itself to increased participation of black players who are already active in these markets and who will have the opportunity to lead a new wave of development in these spaces.
Being primarily a lobby group, the SAIBPP’s focus over the past few months has been on deepening its partnerships with other leading organisations in the property sector. This is to ensure that the voices of black business owners in the property sector are heard and at the centre of all economic policy-making going forward.
The lockdown has also seen the SAIBPP playing a leading role in various industry formations, such as the National Property Practitioners Council and the Construction Sector Rapid Response Task Team, which were instrumental in making submissions on behalf of the real estate and construction sector pertaining to the lockdown regulations.
In addition, the SAIBPP has remained active during the lockdown, in providing educational workshops and webinars to assist its members in navigating the new business environment caused by Covid-19 while empowering them with new skills and tools.
“We will continue to expand the reach of all of our flagship educational programmes and grow our student chapters and young professionals forum, while expanding our national reach through our satellite chapters,” Mutshekwane says.
This education forms part of SAIBPP’s aim to play a leading role in bridging the divide between government and the private sector, while ensuring that the property sector provides solutions to drive inclusive economic growth.
“Our work is far from over. We see the property sector as essential to the country’s economic development, and there is much to be done in ensuring government policy is able to deliver the imperative of inclusive growth going forward,” she concludes.
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER