Milestone collaborative National Budget for SA

Welcome commitments made in the Budget Speech refer to: growing the economy – a key element of job creation, accelerating infrastructure investment and facilitating greater private sector participation in public infrastructure, tackling corruption, and eradicating wasteful and inefficient expenditure while investing in our frontline services – including free basic services for poor households.

Much to the relief of consumers, as recently announced, the proposed VAT increase has been removed in the revised Budget. This is also encouraging for home buyers acquiring new-build units in property developments which incorporate VAT in the purchase price, as well as first-time and other home buyers embarking on property acquisitions, as there are a number of VAT-inclusive services associated with the purchase of a home.

Positively, the Budget has retained the 10% increase in the threshold for transfer duties, which means that properties up to R1.21m are exempt, which is meaningful for first-time buyers as the average price paid by a first-time buyer from January to April 2025 was R1.245m, according to ooba Home Loans.

Regrettably, the fuel price levy increases in June by 16 cents per litre for petrol and 15 cents for diesel, however, on the plus side, this is hopefully offset by indications that fuel prices will decrease by an estimated 23c per litre next month (June).

It is also unfortunate that allowance has not been made for tax bracket creep to allow for inflation, as in effect, this results in higher tax being paid by individuals who are pushed into higher tax brackets.

Amidst a muted local economy faced by various global headwinds, it is extremely encouraging for homeowners and investors that the recovery in national house price inflation (HPI) continues, with the Pam Golding Residential Property Index for HPI rising to 7.2% in April 2025 from year-earlier levels. For the year to date, national house price inflation has averaged 6.4% which is double the average for the whole of 2024 (3.2%).

With consumer inflation remaining anchored just below the lower limit of the current inflation target – at 2.8% in Apr’25, the real (inflation-adjusted) Pam Golding Residential Property Index rose to 4.4% in Apr’25 – the highest recorded since August 2007 – having averaged 3.4% year to date.

The Western Cape remains the leading province, with house prices rising by 7.3% in April from year-earlier levels. Encouragingly however, the recovery in house prices in both Gauteng and KwaZulu-Natal continues to gather momentum – rising by 5.4% and 4.8% respectively last month (April).

All comments above by Dr Andrew Golding, chief executive of the Pam Golding Property group

Issued by Gaye de Villiers on behalf of Pam Golding Properties