Election results could benefit SA’s property market

Private Property South Africa
Jackie Gray-Parker

The voters have spoken. The onus is now on parties to prove that they can deliver services effectively, and this can only benefit the property market.

The municipal elections are over. For months, South Africa’s most prominent parties have campaigned, sometimes quietly and tactfully, often loudly and forcefully. The votes have now been counted. According to the final tally released by the Independent Electoral Commission (IEC), the results are as follows:

• Johannesburg: ANC 44.56%. DA: 38.37%

• Mangaung: ANC: 56.53%. DA: 25.97%

• Nelson Mandela Bay: DA: 46.71. ANC: 40.92

• Tshwane: DA: 43.12%. ANC: 41.22%

• Buffalo City: ANC: 58.75%. DA: 23.40%

• Cape Town: DA: 66.61%. ANC: 24.36%

• Ekurhuleni: ANC: 48.64%. DA: 34.15%

• Ethekwini: ANC: 56.03%. DA: 26.92

Although the ANC retained control of the majority of municipalities, support for the party has declined by eight percentage points while support for the DA and EFF has grown. Notably, the DA wrested control of Nelson Mandela Bay and Tshwane from the ANC, gained significant ground in Johannesburg and retained Cape Town by a large margin. The DA’s wins in Nelson Mandela Bay and Tshwane are particularly notable as both represent former ANC strongholds.

It would seem the tides are changing which can only be positive in a country where municipal management is not always what it should be and violent service delivery protests are consequently the norm.

According to recent figures released by Auditor General Kimi Makwetu in his report on local government, irregular and unauthorised expenditure in municipalities has more than doubled to R14.75bn since the current administrations took office five years ago. When Pravin Gordhan launched the ‘Back to Basics’ programme as Minister of Cooperative Governance and Traditional Affairs, he said that a third of municipalities “work well”, a third “are scraping by” and a third are “frankly dysfunctional.”

The price the public pays for poor municipal management:

Disproportionately high rates and taxes increases and inconsistent property valuations have also been associated with poor municipal management. Recent research performed by the South African Property Owners Association (SAPOA) shows that over the past decade, rates and taxes have consistently increased at a rate higher than inflation across SA’s eight metropolitan municipalities. The upshot is that property owners across the board are battling to keep up.

The Government Performance Index compiled by non-profit agency and research organisation Good Governance Africa (GGA) further highlights municipal inequalities. The survey covered all of SA’s 234 local and metropolitan municipalities and ranked them according to three spheres of performance: Administration, economic development and service delivery.

Service delivery was the most heavily weighted with indicators including access to piped water, electricity, sanitation, regular refuse removal, formal housing, health facilities, police coverage and access to quality education measured by how many residents had completed matric. Municipal capacity, financial soundness and compliance were included in the ranking as were economic development indicators such as poverty, income, work opportunities and the area’s unemployment rate.

Of the top 20 performing municipalities, 15 were in the Western Cape, three were in the Northern Cape and two were in the Free State. Of the worst performing municipalities, 12 were in the Eastern Cape, six were in KZN, one was in the North West and one was in Limpopo.

Such figures and comments are not reassuring and shows that there are serious flaws in the way many municipalities have functioned to date. The way in which municipalities function plays a major role in how well or poorly the community it serves performs which in turn also affects its investment attractiveness as a whole. Therefore, it is imperative that more municipalities function better across SA.

Going forward it would appear that several major cities will have to be ruled by coalitions as there were few outright wins. How these coalitions will play out remains to be seen. Whatever the case, the people have voiced their opinion. Hopefully now the powers that be will actually listen.

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