Deeds Offices a good start, but more needed to stimulate property sector
Carl Coetzee, BetterBond CEO
The reopening of Deeds Offices around the country is welcomed as a hugely positive move that will slowly start turning the wheels of the broader economy, and specifically the property industry. However, the fact that real estate still languishes on alert level 2 of the lockdown regulations, is an expensive state of affairs that our economy cannot afford to let linger. It also keeps the brakes on in terms of much-needed liquidity that could otherwise be delivered to sellers of property and therefore the economy as a whole.
The reopening of Deeds Offices is significant for a number of reasons as their work impacts a wide range of businesses within the value chain and across industries: from banks and bond originators, to property developers, real estate agents and attorneys. The tempo at which properties register and change hands also has a knock-on effect for other organisations that are not directly part of the chain.
As a sector, property contributes significantly to the GDP, which is demonstrated by the fact that Deeds Offices processed R147 billion in mortgage registrations last year. The current restrictions on estate agents participating actively from an economic point of view places much of this at risk and our economy simply cannot afford to forego revenue of this magnitude. That's why we are calling for a rethink in terms of real estate agents' lockdown status.
With the necessary safety measures in place, it is both possible and feasible for estate agents to operate safely in terms of showing property. Show houses and open days are things of the past, but showing a place to a single person or couple at a time, can definitely be done safely and securely. Markets such as the US are showing that with diligent social distancing, increased cleaning and overall careful conduct, real estate can reopen without endangering occupants, visitors, buyers, sellers, tenants or staff. We have no doubt that South Africans can apply this model with even greater success.
The numbers make a compelling case for our real estate partners to be trusted to operate. In a typical month, South Africa sees between 18 000 and 20 000 property deals. Each of these has to be processed by a Deeds Office before any transfer of funds can be made between the parties involved. That's why it's so significant that Deeds Offices have reopened because it eases the risk to income security and improves the livelihoods of hundreds of thousands of South Africans.
We know that across sectors, we need to mobilise efforts to ensure the economy keeps ticking over amidst the uncertainty of the global COVID-19 pandemic. Even with limited functioning, Deeds Offices will allow for much-needed flow of revenue within the economy. In addition, the fiscus - already struggling from our economic downturn pre-lockdown - will benefit from an increase in various taxes coming in: transfer duties, personal and corporate income tax from the earnings of attorneys and banks, etc.
But while the reopening of the Deeds Offices will provide certain impetus to the property sector, we urgently need the real estate industry to be allowed to work as well, in order for our sector to make an even more meaningful - and much-needed - economic contribution at this crucial time.