South Africa’s municipalities have been urged to improve efficiency across multiple areas to ensure the smooth functioning of the property market and facilitate development and sales.
Gilly Dlamini, Executive Director at the Banking Association of South Africa, made the call during the 2nd South African Local Government Association (Salga) Property Development Summit, held this week outside Johannesburg.
Dlamini stressed that municipalities are central to every property transaction. “Without municipalities, there would be no sale, no foreclosure, and no rates and tax collection from a transaction. We cannot afford to have our municipalities fail,” she said.
Streamlining revenue and billing practices
Dlamini highlighted the need for municipalities to review the practice of using property sales to collect outstanding rates and taxes. She warned that disputes over owed amounts could cause sellers to back out of sales, disrupting the market.
She encouraged municipalities to adopt the best practices of banks to improve billing and revenue collection. “Banks depend on municipalities for crucial property documents,” she said. “If these documents are missing, improperly archived, or fraudulent, transactions cannot withstand legal scrutiny in court.”
In funding development projects, Dlamini said, any bottlenecks along the value chain—including municipal inefficiencies—can increase project costs. She urged municipalities to prioritize their largest clients, provide good service, and operate free from political interference, given their vital contribution to municipal revenue.
Municipal innovations and enforcement
Hannes Coetzee, MMC for Community Safety in the City of Tshwane, standing in for Executive Mayor Dr Nasiphi Moya, said the city has focused on enforcing by-laws through weekly blitzes in hotspots, supported by hundreds of law enforcement officers.
Coetzee acknowledged that city planning still has many “grey areas,” but highlighted efforts to improve efficiency. In December 2024, Tshwane introduced an electronic filing system to accelerate building and development approvals—a move that has received positive feedback from developers.
As part of inner-city rejuvenation, the city is also targeting illegal water and electricity connections. Coetzee noted that the municipality has a “Top 500” client list, including major automotive companies in Rosslyn, and deploys a rapid response team for electricity disruptions or other service delivery issues.
Compliance with building standards
Sarah Ruiters, project manager and lead at the Commercial Fund at the Gauteng Partnership Fund (GPF), highlighted non-compliance with building specifications as another major challenge. Houses that do not meet the standards set by the National Home Builders Registration Council cannot be sold, creating bottlenecks for development.
Ruiters emphasized that municipalities must enforce by-laws to help GPF fund projects and make them bankable. Strengthening compliance ensures that developers can access financing and investors can confidently participate in the property market.
Supporting emerging developers
During the summit, delegates discussed measures to help previously disadvantaged developers enter the market. One suggestion was to reduce developer contributions to 3% of the project value, making participation more feasible.
Dlamini noted that banks already accept higher risks through raised impairments, but any additional risk of lowering contributions could be absorbed by Development Finance Institutions, ensuring that new entrants are supported without destabilizing the financial system.
The path forward
The summit made it clear that municipal efficiency is a critical enabler of property development and sales in South Africa. From revenue collection and documentation to by-law enforcement, electronic approvals, and compliance monitoring, municipalities play a pivotal role in the success of property projects.
By prioritizing large clients, reducing bottlenecks, embracing technology, and maintaining political neutrality, municipalities can help unlock investment, accelerate property development, and improve service delivery.
The summit highlighted that collaboration between banks, municipalities, developers, and funding institutions is essential for a functional, transparent, and thriving property market. With sustained focus on efficiency and compliance, municipalities can facilitate development, support emerging developers, and ultimately stimulate economic growth in urban and suburban areas across the country.
- South African municipalities are urged to improve efficiency in property market processes to facilitate smooth development, sales, and revenue collection, emphasizing the critical role they play in transactions.
- Gilly Dlamini highlighted the need for municipalities to adopt banking best practices, avoid political interference, prioritize large clients, and reform practices around using property sales to collect arrears.
- The City of Tshwane has implemented enforcement blitzes, an electronic filing system for development approvals, and targeted illegal utility connections as part of its efforts to improve city planning and service delivery.
- Non-compliance with building specifications remains a key challenge, with calls for stricter enforcement of by-laws to enable funding and bankability of development projects, especially by institutions like the Gauteng Partnership Fund.
- To support previously disadvantaged developers, suggestions include lowering their financial contributions to projects, with banks potentially taking on more risk while Development Finance Institutions absorb additional risks.
Gilly
In funding development projects,
Hannes Coetzee, MMC for Community Safety in the City of
Coetzee acknowledged that city planning still has many “grey areas,” but highlighted efforts to improve efficiency. In
As part of inner-city rejuvenation, the city is also targeting illegal water and electricity connections. Coetzee noted that the municipality has a “Top 500” client list, including major automotive companies in Rosslyn, and deploys a rapid response team for electricity disruptions or other service delivery issues.
Sarah Ruiters, project manager and lead at the Commercial
Ruiters emphasized that municipalities must enforce by-laws to help GPF fund projects and make them bankable.
By prioritizing large clients, reducing bottlenecks, embracing technology, and maintaining political neutrality, municipalities can help unlock investment, accelerate property development, and improve service delivery.
