Finance Minister Pravin Gordhan's first Budget speech drew mixed reactions from property bosses on Wednesday, with some welcoming and others describing it as "disappointing".

Berry Everitt, of the Chas Everitt International property group, welcomed the Budget as "largely positive and confidence boosting", but said it did not "contain many direct benefits for the real estate industry".

The group was confident, however, that positive aspects of the Budget would "undoubtedly have a spin-off in the property market".

"Especially encouraging aspects are the fact that the GDP [gross domestic product] this year will be higher than initially expected at 2.3% and that government's budget deficit will be cut to 7.3% of GDP.

"In addition, it looks like most spending will be taking place in all the right areas to support a developing economy - job creation, especially for young people, health, education and skills training, affordable housing and most of all infrastructure development, particularly in rural areas," Everitt said.

Another positive outcome of the Budget that could boost the property market was the R6.5 billion worth of tax relief for individuals, he said.

Sharing his views was Young Carr, chief executive officer of Aida National Franchises, who commended the R1 billion allocated to housing provision and Gordhan's undertaking that consumers would not be faced with increases in personal tax this year.

This, Carr said, would "free up much-needed revenue that can profitably be employed elsewhere.

"The R1 billion allocation to speed up housing provision and the R500 million allocation for bulk water infrastructure will improve prospects for the local property market, which is slowly coming out of a severe slump.

"We also welcome the emphasis on rural development, since it ties in with job creation over the longer term - a much needed strategy for the wellbeing of the property market as a whole," he said.

He also welcomed the government's initiatives to sit down with commercial banks and address bank charges.

"Every small saving that will put more money in consumers' pockets will contribute to kick-starting an economic revival. We are also pleased that consumers will not be faced with increases in personal tax this year," Carr said.

However, Gerhard Kotz , of the ERA SA property group, and Tjaart van der Walt, chief executive officer the RealNet estate agency group, disagreed.

Kotz said the minister had failed to stimulate the property market.

"The Budget was disappointing, given what's happening to stimulate property markets globally and taking into account property's generous contribution to our overall GDP," said Kotze.

Gordhan should have introduced a broad tax incentive for home buyers, established greater clarity on interest rates and introduced improved investment incentives for developers as was done in overseas markets, he said in a statement.

"House price affordability is the key and in the UK, because of various incentives, someone with average earnings can now afford to buy their first house in 21% of local authority areas, up 15% on last year..."

Kotze said that in the UK, the house price-to-earnings ratio was at its lowest level in more than six years, making it easier to get on the property ladder.

Unlike the current South African situation, the amount of disposable income needed by first-time UK buyers to cover mortgage repayments had dropped from its peak of 48% to about 31%.

While there were "flickering signs" of improvement in the local property market, Gordhan's Budget should have been used as a platform to expand recovery beyond the announcement that the government would work with banks to find ways to help more middle-income people to access home loans.

"The recovery needed to be kick-started," said Kotze. "The latest Absa house price index, for example, shows that the upward trend in nominal house price growth evident since the middle of 2009 continued in January, although real (after inflation) prices continued to decline up to December last year.

"And the FNB house price index shows that the average house price declined by 3.9% in 2009, although there was an improving trend towards the end of the year."

Van der Walt welcomed aspects of the budget, but generally agreed with Kotz, arguing that more should have been done to address the housing problem.

"The R1 billion allocated to speeding up housing provision is disappointing.

"This figure is but a drop in the ocean. A large percentage of South Africans have low incomes and need help to gain secure tenure.

"Not only is it a basic human right, but large-scale housing incentives will create many jobs, which in turn, will contribute significantly to reducing unacceptable crime levels," he said.

To speed up housing delivery, he suggested that the government make "large tracts of state land available to developers free of charge".

Source: Sapa