By Kentish Moorghen

Very often the presentation of a budget is viewed as political motives. To my opinion, we must think beyond that and have a constructive attitude to recover from the worst two years we have all been through.

It is a fact that the global economy has still a long way to go to get out from that “fragile” environment. However, it is important to point out that confidence has been improving after the unprecedented slowdown due to the pandemic. It is normal that measures should be taken to alleviate the pressure and come forward with measures that will make the economy conducive for development and growth. In the same breath of reconstruction, we should not ignore the fact that at a point in time a rebalancing of the incentives and measures should be considered so that it is not taken for granted that they will always exist.

Inflation, which is of a great concern, is expected to slow down when we refer to the forecast of reliable and capable economists. As a real estate professional, I will prefer to venture on how the incentives related to the real estate industry can help in the reconstruction process and how the industry can contribute positively to the gross domestic product (GDP).

For many years incentives around real estate was with regards to registration duty and land transfer tax. In one budget it will be removed and yet in another one it will be reinstated; and this has been going on for many years. However, the extension of the Home Ownership Scheme is a laudable effort and in a disguised way a zero-rated registration duty for transactions up to Rs 10 million. I stress the fact that most of the transactions emanating from the middle-income earners is below Rs 10 million. I am of the opinion that this scheme should have been applied not only on sales through the VEFA structure, but should have been extended to “Société Civile Immobilière d’Attribution” as well. This incentive would have given some impetus to small developers as we are well aware that using VEFA as a structure is not only expensive but also ambiguous.

It would be crucial that there is a proper legal framework for property valuers.

Inflation, disruption in the supply chain and high volatility in the cost of construction materials have led to many housing projects being either abandoned or scaled down. Coupled with that is the rate of default with regards to loan repayments because of increase in interest rates. I believe that this is a major issue which should have been addressed. It is true that the Home Loan Payment Scheme is in a way helping, but it is not enough. A price control mechanism on certain important construction materials should have been implemented.

Since the introduction of the various schemes for attracting foreign buyers, the market has been constantly expanding and the contribution in terms of foreign direct investment (FDI) has grown over the years. Today, there are various options of selling to a non-citizen and, whether we like it or not, it has contributed towards creating that multiplying effect conducive for growth and development.

To conclude, it was a very good initiative to set up the Real Estate Authority some months ago. However, since then, we have not seen anything tangible that the authority has done to professionalise the sector. It is high time that real estate professionals have a proper platform to propose some constructive reforms. One of them which I strongly support is the creation of a Council of Professional Valuers. We have in Mauritius legal frameworks for architects, engineers, quantity surveyors and so on. Valuation playing an important role in both mortgage lending and assessing property values for accounting purposes, it would be crucial that there is a proper legal framework for property valuers so that valuation reports are strictly done in line with the International Valuation Practice Standards.

Kentish Moorghen
Kentish Moorghen is the CEO of Prime Pillar Group.