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How has the property sector changed since 1994?

‘Our view is that transformation has been extremely slow…after 26 years of democracy’ – Tholo Makhaola, SAIBPP president.

 

NOMPU SIZIBA: We’re still getting feedback from different stakeholders in the economy on President Cyril Ramaphosa’s State of the Nation address. The South African Institute of Black Property Practitioners was keeping a close eye on the president’s utterances around land and its development. Of course, the president announced the dispersal of some 700 000 hectares of government land, and made commitments to invest in issues like student accommodation. But, to get a sense of what caught their eye, and where they were hopeful for more detail, I’m joined on the line by Tholo Makhaola, the President of the South African Institute of Black Property Practitioners (SAIBPP).

Thanks very much, Tholo, for joining us. In terms of giving us some context, since democratic dispensation in 1994 what have your general observations been around transformation in the property landscape?

THOLO MAKHAOLA: Thank you very much for the opportunity. Just to give an idea of kind of how SAIBPP views property itself, SAIBPP is essentially a group which is responsible for advocacy and facilitation of increased and what we have to call meaningful involvement of black people in the commercial residential property sector, as well as the total environment and total environment practitioners.

So, essentially, we look at transformation sort of through our three pillars that have transformation, advocacy skills development and enterprise development. And in terms of transformation as far as the property sector is concerned, our view is that transformation has been extremely slow, and we just don’t feel that we’ve made the inroads that we would have liked to have made after 26 years of democracy.

NOMPU SIZIBA: Yes. In his Sona address, President Ramaphosa referred to funding being made available for the likes of student accommodation. What are your sentiments in this regard, and to what extent would your members be able to meaningfully participate in this space?

THOLO MAKHAOLA: Look, our feeling is that our members are perfectly positioned to meaningfully participate. I think what did encourage us is that a lot of the student accommodation spend that would be made would be in support of President Ramaphosa’s idea of the development of the TVET colleges, which essentially would be to the benefit of, for lack of a better phrase, previously disadvantaged areas. And I think he did mention some kind of what one might consider far-flung areas, which are now going to get those TVET colleges. And I think this presents the perfect opportunity for our membership to meaningfully participate. What we typically have always battled with – and we just want emphasise this point – is that access to funding is has always been …… in terms of our meaningful involvement.

And obviously with his announcement of a state-owned bank, we’re kind of hopeful that that might also assist us in being able to participate.

NOMPU SIZIBA: Just to give us a sense of your composition, what type of organisations or people are in the Institute of Black Property Practitioners?

THOLO MAKHAOLA: Like I said, we have essentially property practitioners in the residential and commercial [areas]. You get anyone from property developers to asset managers, and then we’ve got environment professionals – and essentially that’s kind of your architects, your engineers, quantity surveyors, who represent what we like to call the entire property development value chain.

So, within our membership we feel that we are kind of able to take an idea from gestation all the way to a complete property development, and be able to also manage those facilities as well.

NOMPU SIZIBA: Social housing is another area that the president highlighted – where there is a serious need, of course. But what do you think would be a win-win scenario in terms of the contractors that came on board, and money issues? And presumably commercial banks aren’t likely to come on board unless they’re able to see themselves making some money out of these kind of investments.

THOLO MAKHAOLA: Absolutely. One of the statements that we’ve made is we do really welcome this emphasis that the president has put on the creation of social housing. What we did note is that in the previous Sona, the president mentioned the formation of the Human Settlement Development Bank, and we realised that in this Sona there was a large silence on it. I’m not sure if it’s because we’re talking semantics here. I think when he spoke about the delivery of social housing now, he merely called it the “social housing programme”. So one would like to believe that this is kind within the ambit of that Human Settlements Development Bank, the details of which we still aren’t clear about – how the mechanics of that will work. And I think you are aware that’s kind in the social housing space. We do have the social housing resource authority, and the regulatory authority, which is …… and currently as it stands, black property developers are participating in that space through the likes of TUSK and the GPS.

So one is kind of hoping that you get more synergy and more clarity in terms of how these funding instruments are working cohesively together to assist us to achieve what it is that we’re trying to achieve.

NOMPU SIZIBA: You’ve welcomed Lanseria being identified as an emerging smart city. What sort of potential do you see in that area from a growth and development perspective? Just earlier I was listening to the parliamentary debate, and John Steenhuisen criticised the president, saying he talked about Lanseria being an emerging smart city, but we can’t even keep the lights on. There’s a point there but, assuming resources can be invested in that sort of thing, where would you get involved and what would you like to be doing in that area?

THOLO MAKHAOLA: The Lanseria development has been mooted for the past ten years, if I’m not mistaken. Over the past five years there was actually talk of a kind of infrastructure that that has kind of gone into that area as well, and I think this was kind of all in anticipation of this announcement that the president has now made.

So we see ourselves as being able to play a meaningful role. I think that’s not city development; it’s also one of the first obviously smart city developments, but which is also led by black developers. We are  very encouraged by that.

Just to maybe emphasise the fact, I think we are concerned that we might have raised in terms of Lanseria is we need to accept that we do have an issue of our inner cities currently, which are not in good shape. So while we did welcome the idea of the Lanseria smart city development, we did also note the president’s silence with concern – the fact that there are no serious plans around how we’re going to deal with our current inner-city development.

NOMPU SIZIBA: So what do you think the way forward is in this regard because, like you say, you need a city-wide or a country-wide strategy without necessarily preferring one area over the other. But then also there’s the issue of resources – one step at a time.

THOLO MAKHAOLA: Yes. One of the other issues, really, that we’ve looked at is the idea that the land question – around that. Then obviously we’ve always …… land consumers as kind of unsteady leaning more towards food security, and not the idea of actually being able to accept for the real estate perspective …… So I think there are a lot of opportunities that do exist in greenfields developments also that we do.

NOMPU SIZIBA: Just on a  broader  level, with the economy still being in low-growth territory, especially on the back of constrained power supply in the short to medium term, what’s your outlook for the property sector in 2020?

THOLO MAKHAOLA: Look, our feeling is that there are still tough times ahead, but we are very optimistic. And I think one of things that our …… started as an advocacy group have tried to emphasise, is that we feel that the role of real estate and the role of property in terms of the development of the economy has really been underestimated. I think that if we could place a lot more emphasis on the potential – when we are talking in terms of jobs and opportunities – that property development itself could unleash if that were more focused, then we definitely could see better growth than we are seeing currently in the economy.

NOMPU SIZIBA: Some of the statements that were made in the Sona are then translated in the budget. From a budget perspective would you be quite excited if there were some money put aside under the infrastructure umbrella towards developing land and things like that?

THOLO MAKHAOLA: Absolutely. Like I say, definitely we are waiting with bated breath to hear exactly what it is. The president just mentioned that the minister of finance will elaborate on the state-owned bank and the mechanism around that, because we still feel that commercial banks, as they currently are, are a bit unfair – specifically to new entrants in property development as well as with their credit measures and the way that they currently are rating people. But we’d definitely be excited to have a good chunk set aside and ……

NOMPU SIZIBA:  [Chuckling] Let’s see if that chunk is set aside. Thanks very much, Tholo, for your time.

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Hahahah
The South African Institute of Black Property Practitioners (SAIBPP) :
“are very optimistic.”

Is there a South African Institute of White Property Practitioners?

There clearly needs to be more groups focused on the rights of whites (and for that matter other races like indians, coloureds, asians, as well)

South African Institute of White Property Practitioners
White First Land First
White Management Forum
White Lawyers Association
etc.

……access to funding…….state owned bank…… meaningful participation…….

As far as I am aware banks need to have their loans and interest paid back in order to function.
VBS?

I know thousands of white South Africans. Thousands. Yet I do not know a single person or family that got land or property for free. How many whites know someone that did??? Everybody I know paid for property. This created a market contrary to the nonsense the ANC and EFF is selling their poor voters.

What has changed since 1994 is land, housing and student accomodation is now given away for free. When something is given away for free it has no value.

Look at listed property share prices. Its destroyed. Why? Just the talk of EWC and a terrible socialist economy. It means property has no value. Or will very soon have no value.

“Participation” going forward seems to be dependent on “Funding” ie. getting a slice of the free stuff pie. No talk of a functioning market that generates money. No it must come from the socialist government via some sort of “Grant” Sickening and pathetic to say the least.

Like everything else the ANC touch it is turning into a hopeless disaster that can possibly never be fixed. Once something has lost value its gone.

In the process a large portion of the population is alienated. That is really clever as that means a large portion of the market is gone. Forever.

Agreed. I would love to offload my “property” shares as I suspect a worse bloodbath as EWC, Eskom etc get fully factored in.

Firstly, I doubt that you know thousands. Maybe you have the stats of thousands, and you can thus quote your source, but you do not know the financial affairs of thousands.

Secondly, I am sure you have heard from those thousands, that some have inherited their property, therefore, they indeed did get it for free (as the individual)

This is still not a reason for the prosed EWC policy, but some whites did get their property for free – albeit in a recognised fashion

But the property was paid for initially. Don’t split hairs.

Ever heard of inheritance taxes? And as Chris Stoffel says, if my parent dies and I inherit something from him, the chances are excellent he worked extremely hard to acquire it.

Splitting hairs. Really.
Some properties in SA was obtained for free and passed on or later sold and the proceeds passed on – Fact
Some properties were expropriated without compensation in the past – Fact

Yes those were done within the context of the day. Context that for some instance included inheritance tax or estate tax. Which some my argue is but a drop compared to the value if you would have financed and paid over 20 years. ( And by the way at 20-25% which is the tax rate, will you take that as compensation if they take your land seeing that you see that as adequate “payment” for not deeming an inheritance as free)

But this is exactly the problem with the land debate. Emotion and Propaganda/Populist Opinion.

Facts are that some got their land and or resultant privilege for free
Facts are that some lost their property without compensation
Facts are that a new wave of EWC will be disastrous.

But arguing and spewing opinion mis recognising facts are not helping. In Parliament, blogs or braaivleisvure. If the white minority can disregard the facts of whats was, why can the black populist not ignore the facts of what will be? This is childish arguments and will not get us anywhere.

And let me not start with the “my forefather work hard” excuse. Go tell that to the domestic worker who wakes up at 4 and is back home at 8 due to her traveling requirements. We have a land issue – fact -, and the “work hard” piece of advice is not going to solve it. (Nor is EWC)

I have not realy calculated how many people I know or have known in the past but its many. Having been in the financial industry for over forty years I would guess I have met at least one family of four per week else I would not have survived. Started out selling life assurance etc.

The simple question is. Do you personally know someone (a white) or a family even that has received land or property “THAT WAS PREVIOUSLY EXPROPRIATED” I certainly have not but at the same time I am not saying it never happened.

The ANC, EFF and many others make it sound as though every white in this country got his farm or house for free?

I maintain I dont know of a single person or family that this has happened too and I suspect most whites don’t know of anybody that did receive “Previously expropriated property” for free.

A terribly small portion of the white population might have benefitted. The rest paid.

Some thoughts…
You cannot transform off the back of failing entities and SA is a failing entity.
Most top tier developers in SA do not agree with the way BEE codes are written. No broad base and very much handout orientated.
Transformation should be about building a broad competence not a few black billionaires.
Pinning hopes on a few property themes like student accommodation will not change the game much as property does not work like that.
Proof of how BEE has failed is that there are very few large and medium sized black contractors. Even with sooo much money thrown at housing (wasted or corrupted).
The problem is that the more it is forced the less it happens.

Lol. How many black property owners especially in townships obtained their title deeds these past 26 years. The deeds office is in such a shambles that record keeping of ownership of properties is a major problem. No wonder after 26 years there is still disputes regarding land ownership. Transformation is not slow it has gone backward.

I suggest we start a White Property Owners Council (“WPOC”) – lets see how far that gets before the cadres go bonkers but no there’s a Black this and a Black that … who knew the majority were so incompetent and insecure?

End of comments.

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