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