By Deon van Zyl, chairperson of Western Cape Property Development Forum (WCPDF)
SOUTH Africa’s Reserve Bank Governor, Lesetja Kganyago, recently voiced his opinion on whether interest rate cuts really improved economic growth.
To quote: “There is only so much that can be achieved with monetary policy. Changing interest rates is certainly easier than improving education, managing urbanisation or ending load-shedding. What really matters for inequality is economic growth, job creation and productivity growth.”
Kganyago has been criticised on many platforms for being too conservative and hawkish in his stance on lowering interest rates.
There is no doubt that lowering interest rates will have a positive impact on the property industry, so we continue to hold our breath for the next Monetary Policy Committee (MPC) meeting in mid-September. Where we do, however, strongly agree with the governor, is that we need economic growth, job creation and productivity growth. Which leads one to think: where can productivity growth come from if interest rates are not lowered in September?
Our industry is known for pointing the finger at the government for causing red tape, for refusing to optimise policy, for continuing a “business as usual culture”, and for the mess caused at state-owned enterprises such as Eskom.
The WCPDF has often taken the role of government agencies to task, not least the lack of performance by the NHBRC and SALGA. And we will continue to call out the Auditor General for not asking why budgets are not being spent; in other words, why is the AG not going after the underspending of capital budgets and bureaucratic-heavy procurement processes?
These topics remain fair game, and we will continue to highlight these inefficiencies for as long as they continue to exist.
But the time has come to look in the mirror and ask some probing questions about the performance of the private sector. We know, for example, that South African banks continue to be slow in extending credit to developers; banks have very little appetite for what they consider to be risk while at the same time making incredible profits.
But put that aside for now; what about the performance of banks in doing such mundane things as knowing where title deeds, held as security against finance, are kept and delivering them within reasonable time?
Anecdotally, the WCPDF was recently informed of one of the largest banks not being able to find title deeds for more than two months, only to magically produce them when threatened with legal action.
Long gone are the days of personal service with a real bank or account manager, replaced instead with automated emails and AI call centres. Is this the performance that we expect from our internationally-lauded financial sector?
What about the millions lost in interest every year due to lack-luster service? And what about building environment professionals submitting less-than-professional applications?
What happens when companies challenge the awarding of tenders simply because they themselves did not get the tender? The time has come to dare the government to name and shame poor applications and any such service providers who delay statutory processes, whether these be a land-use application, a development proposal, a building plan or a transfer. We will continue to hold the government to account but we need, as an industry, to seriously take a look at ourselves and ask the very important question: how much of the inflationary impact in the property sector can be ascribed to bad service from private sector role players?
It is crucial for our private sector members to hold each other accountable for the challenges which we create for ourselves, and – just as we call on government and the financial institutions – it is also imperative that we call on the professionals within our industry to not only uphold professional standards, but actively work together to grow and transform the industry.
