Property & Wealth

Election results positioned property market for massive injection

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The results of the recent local government election did not only register a huge swing away from the ANC under Zuma’s leadership, but was also a manifestation of the consolidation of South Africa’s political middle ground.

If handled correctly, it could also translate into a massive boost for the country’s private property market – especially the residential sector – and strengthen the middle class, which is so critical to social stability.

The move towards the middle in particularly the country’s bigger urban areas is not only reflected by the substantial growth in support of the Democratic Alliance (DA) there, but ironically so, by the increased support for the Economic Freedom Fighters (EFF) with their hereto populist image.

For many black voters and traditional supporters of the ANC in urban areas, who wished to register their dissatisfaction with the ANC and Mr Zuma, a jump to the DA was psychologically just too big. Many of them probably took their vote to the EFF.

An opinion survey last week on Facebook among the EFF supporters, while potential coalitions were widely discussed, brought a very interesting perspective to light. The party’s spokesperson, Mbuyiseni Ndlozi, said: “We ran a poll that close to 18,000 participated in on Facebook and all of them said we must go with the DA.” (Our emphasis.)

This result seems to indicate a strong bias towards a more moderate approach, at least at local government level.

Property market opportunity

In this situation, to our mind, lies an opportunity for a win-win-situation for both the DA and its free market approach towards management of the economy, and the EFF with its strong position towards transfer of property to the black community.

We have often in this column punted an increased tempo of transferring to people the titles to property in the hands of local government. In many instances they have been renting these residential properties and this would not only give them a valuable asset, but also make them part of the formal economy and provide security to raise loans.

This would give them a solid stepping stone from which to enter the ranks of the middle class, which is regarded as the glue of social stability in the country.

Now is probably an ideal opportunity for local coalition governments to launch focused, speed-up programmes to transfer titled ownership on land under their control.

The wisdom that a strong middle class is one of the most important assets of any society is not a modern slogan of capitalism. As long ago as the 4th century BC, the Greek philosopher Socrates said: “The most perfect political community is one in which the middle class is in control, and outnumbers both of the other classes.”

Zuma misses the boat – again

We have, more than once in the same vein in this column, called for a new dispensation with regard to titled ownership on communal land in the former, mostly rural, so-called homelands.

At this stage, the land, almost without exception, belongs to the state, and is held in trust for them by hereditary traditional leaders under a dispensation not all that different to the feudal system that was abolished 500 years ago in Europe.

For many black people, and especially share croppers or tenant farmers, often women, this form of feudalism remains a reality.

On Woman’s Day last week, as keynote speaker at the main event at Pretoria’s Union Buildings, President Jacob Zuma urged the private sector‚ banks in particular‚ to provide loans to women‚ especially women in rural areas‚ as part of promoting the economic development and growth envisaged in the National Development Plan.

However, until the ANC, and especially Mr Zuma review their special relationship – almost a love affair – with traditional leader/overlords, not much will change on that front.

Financial institutions cannot provide loans without security. The potential of tribal land needs to be freed up – and then even Mr Zuma will be able to acquire a bond to repay the money for Nkandla the court ordered.

by Eve van Basten

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