This year’s State of the Nation Address (SONA) was striking in its honesty. The President definitely did not shy away from the realities that South Africans live with every day, including crime, corruption, failing services and the frustrations of low economic growth and far too few jobs.
And we admire his candour about the dire threats that the country faces from organised crime in several spheres, including mining, transport and construction, as well as high levels of police and procurement corruption.
But in the real estate industry, the challenges we grapple with most directly - and consistently - are often more basic: water that doesn’t flow, electricity that is still subject to load reduction, crumbling municipal infrastructure and unemployment levels that make it difficult for families to access decent housing.
For property owners and developers, reliable water supply is non-negotiable. Without it, no home, business, residential estate, shopping centre or industrial park can function properly. So it was reassuring that the SONA was also direct on this issue. The President acknowledged that poor planning and maintenance at municipal level are at the heart of the crisis and committed more than R156bn over the next three years to fix and expand water and sanitation infrastructure.
The establishment of a National Water Crisis Committee, chaired by the President himself, together with the proposed National Water Resource Infrastructure Agency and the ability to intervene where municipalities fail, also signals a more hands-on and accountable approach.
On electricity, it was encouraging to hear that load shedding has been put behind us and that structural reforms in the energy sector are continuing. The restructuring of Eskom and the rapid expansion of private sector investment in renewable energy projects indicate progress in creating a more stable and competitive power environment. Predictable electricity supply is fundamental to restoring confidence, protecting asset values and attracting new investment to help grow the economy.
The President also spoke very clearly about extensive plans to address the widespread dysfunction in local government, and as I noted earlier this year, this is critical for the real estate industry. Property values are closely tied to the quality and consistency of municipal services, billing systems and planning departments in their suburb, town or city. Quite simply, where local government works, markets thrive.
However, perhaps the most important plans laid out in the SONA are those for advancing growth and job creation. Expanding infrastructure investment, opening up new international trading options for local companies, supporting small businesses and driving growth in labour-intensive sectors like mining, agriculture and tourism are not abstract economic goals; they are essential if we want more South Africans to build stable futures, and to be able to rent or buy decent homes.
Then finally, I think the proposed State Property Company holds real promise. It has been spoken about for years, but if it does now materialise, it could drastically cut the amount that government currently spends on renting space from the private sector and add billions of rands back to the fiscus. In addition, it could unlock well-located public land for large-scale affordable housing developments and help to make a real dent in the housing backlog.
There is clearly much work to be done. But I think there is also a real sense of forward momentum now, and growing confidence in our collective future.
