EDITORIAL VIEW
EDITORIAL VIEW
Case for Investment Requires Foxy-Type Thinking
In the battle of the hedgehog( politicians and big business) versus the fox( entrepreneurs), the fox always wins, despite hedgehogs being viewed as‘ experts’ by the general media. Budget speech is the one time of the year that hedgehogs manage to dominate exposure in Real Estate Investor Magazine( REIM).
While South Africa has a lot of good going for it, our volatile political leadership has an open agenda of controlling treasury for its own benefit and not for the sake of addressing inequality. These political shenanigans have a direct effect on negative economic sentiment, which does not look favourable for investors.
The State of the Nation Address( SONA) has become an annual comedy show, viewed rather for light entertainment from politician’ s circustype antics than listening to President Zuma’ s groundbreaking plan to build the future of the country.
Zuma’ s single-minded message of‘ radical economic transformation’ from‘ white monopoly capital’ is resentment by race. He remains ignorant of the growth of the black middle class from R1,7m in 2004 to today’ s figure of R5,4m. Zuma’ s‘ transformation’ comments in the 2017 SONA did not even make a blimp on the rand radar screen. Bigger issues of inequality, redistribution to the poor, and addressing high employment did not even feature this year.
The budget speech, on the other hand, presented by Finance Minister Pravin Gordhan, was a major improvement compared to this year’ s SONA. Under constant attack by his peers, however, Gordhan could not improve the investment case into SA.
According to Professor Brian Kantor, ex head of the UCT Department of Economics( 1986-1990) and former Dean of the Faculty of Commerce at UCT( 1997-2001), there are only two ways to stimulate growth.“ One, reduce government salaries and, secondly, privatize inefficient, stateowned companies such as Eskom, SAA and Transnet,” says Kantor.
Good or bad foxes look at the environment and determine the best solution based on the best data available at the time. The good news for property was the increase in the exempt threshold for transfer duty fees from R750 000 to R900 000. As a foxy publication, we say that, despite the deadend budget, investing in real estate looks good right now.
We believe the only way to address the inequality problem is to get the poor onto the property investment ladder through educating and empowering them to invest in affordable housing. I am happy to say that, here at REIM, we are big drivers of these two aspects.
Successful investing.
NEALE PETERSEN
FOUNDER & PUBLISHER
“ Real transformation requires real honesty. If you want to move forward – get real with yourself.” BRYANT MCGILL
www. reimag. co. za MARCH 2017 SA Real Estate Investor 3