South African property groups welcome MTBPS but press for lower interest rates
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Property groups have welcomed Finance Minister Enoch Godongwana's Medium-Term Budget Policy Statement as a stable fiscal plan, but say lower interest rates are needed to revive the housing market.
South African property groups have welcomed Finance Minister Enoch Godongwana's Medium-Term Budget Policy Statement (MTBPS) as a stable and fair fiscal plan, but used their response to press for lower interest rates ahead of the Reserve Bank's November Monetary Policy Committee meeting.
Samuel Seeff, chairman of Seeff Property Group, said the economy and property market had shown resilience despite significant headwinds. He noted that the growth forecast had been revised down to about 1.2% from 1.6%, which he said appeared realistic given international pressures, including conflict in the Middle East and global trade policies.
Seeff welcomed the decline in national debt as a percentage of gross domestic product, a growing primary surplus and lower debt service costs, together with proposed fiscal guardrails and legislation intended to keep government within strict spending and debt limits. He also backed an expanded oversight role for the Financial and Fiscal Commission, including the ability to veto non-compliant financial plans, and municipal finance reforms aimed at encouraging realistic budgets and better revenue collection.
He welcomed the upward revision of tax revenue by R17.1 billion, largely because of higher commodity prices in the mining sector, and said there appeared to be no immediate plans for tax increases apart from inflationary adjustments to personal income tax brackets over the next three years from 2027.
"Higher taxes, living costs and interest rates are a direct impediment to economic growth and the property market," Seeff said, reiterating the need to avoid further rate increases and to reduce rates as soon as possible. He added that constrained household income and employment growth made it harder for first-time buyers to enter the market, worsening the country's housing shortage.
Dr Andrew Golding, chief executive of Pam Golding Property Group, said the temporary fuel levy reductions were welcome news for consumers and businesses, and that a more stable economic environment and greater financial headroom for households were important to sustaining residential activity. He said first-time buyers were particularly important to the market but often most exposed to rising living costs, deposit requirements and the overall cost of home ownership.
The Federation of Unions of South Africa (Fedusa) said it was concerned that the 2026 growth forecast had been cut from 1.6% to 1.2%, warning that growth at that level would not address the unemployment crisis, and that fiscal discipline had to be accompanied by a deliberate strategy to expand productive economic activity.