The South African Institute of Valuers (SAIV) has welcomed the State of the Nation Address (SONA) by President Cyril Ramaphosa on Thursday, 11 February. The South African Institute of Valuers, founded in 1909, is the national society of professional real estate valuers.
Commenting on the address, SAIV president Tracey Myers said they are thrilled to hear about the launch of the Economic Reconstruction and Recovery Plan which focused on a massive rollout of infrastructure throughout the country; a massive increase in local production; an employment stimulus to create jobs and support livelihoods; and the rapid expansion of our energy generation capacity.
“The delay in implementing the proposed infrastructure rollout plan will have a massive effect on the development that needs to be undertaken in the Built Environment. Developers are working on new developments and in order to do that we need to maintain infrastructure which becomes a developer’s cost. The lack of infrastructure leads to the developer incurring the cost of the upgrading or installation of new roads which leads to the development being overpriced with the financial institutions not being willing to fund, ultimately resulting in the developer not being able to produce,” said Myers.
The SAIV also believes some of the direct knock-ons of delayed infrastructure development include the Gautrain expansion project being stalled and the delay in a new road network which would result in less traffic in business hubs including Sandton. “This results in people spending more time in cars which emanates in lost productivity hours further hampering economic growth,” she said.
In conclusion, Myers stressed that valuers have a big role to play in the economy and urged government to work with different stakeholders including business to hasten infrastructure growth. “As valuers, we are valuing land during pre-development to see if financial institutions will provide support. Additionally, we are valuing existing structures for re-bonding and insurance purposes, which makes us critical in the infrastructure space. The valuation profession determines the values for the local and national government and this is the basis of the calculation of rates and taxes revenue for municipalities, and ultimately the economy. We are hoping the proposed infrastructure development plan will revive interest in the market, which will ultimately lead to development in the construction industry”.