Significant and tangible variations in cost competitiveness among different municipalities have been highlighted in a recent study, primarily attributed to service charges, property rates and essential fees related to development.
Image: Leon Lestrade
The July implementation of the General Valuation Roll (GVR) underscores the balance that municipalities must maintain between financial sustainability and fairness to property owners.
It recognises that an accurate GVR is essential for generating the revenue required to maintain infrastructure and deliver essential services, says the South African Institute of Valuers (SAIV).
At the same time, the National Society of Professional Real Estate Valuers says it ensures that property owners are not unfairly burdened, supporting trust in the system.
The effectiveness of the system relies on informed and engaged stakeholders, says Kobus Nel, President at SAIV.
“All property valuers involved in the GVR process should be committed to promoting consistent methodologies, reliable data, and strong professional standards, ensuring that the GVR remains a credible and transparent instrument for fair governance and sustainable community development.”
In an article published recently, HBGSchindlers Attorneys and Conveyancers described the GVR as establishing the market value of every property at a single, specified valuation date.
It says this approach ensures consistency in the assessment process and provides a fair method for calculating rates across the municipality. “In this instance, because the date of the GVR is 01 July 2026, the date of the valuation of the properties will be exactly one year before the drop of the GVR, being 01 July 2025.”
The recently published report, "The Competitiveness of the KwaDukuza Commercial Property Sector 2026: A Comparative Municipal Cost and Investment Competitiveness Study", provides a comparative analysis of municipal property-related development costs across KwaDukuza Local Municipality, eThekwini Metropolitan Municipality, Mbombela Local Municipality and Stellenbosch Local Municipality.
The analysis is said to focus on key cost drivers affecting retail, office, industrial and logistics property development, including property rates, utility tariffs and development application fees, to assess relative municipal competitiveness.
The comparative assessment of municipal development costs across KwaDukuza, eThekwini Metropolitan Municipality, Mbombela Local Municipality and Stellenbosch Local Municipality reveals clear and material differences in cost competitiveness, driven primarily by property rates, service charges and key development-related fees.
The authors of the study said the complexities of comparing utility costs between municipalities are significant and cannot be overemphasised. It warned that caution must be taken in the interpretation of the detailed findings.
It said:
A critical finding of the study is that recurring municipal charges, particularly property rates and utility consumption tariffs, are the dominant drivers of long-term development viability, far outweighing once-off administrative and application-related costs.
It said this underscores that the ongoing cost of operating within a municipality is a far more significant determinant of investment decisions than initial development fees.
Taken together, it said the results indicate that municipal competitiveness is shaped by the cumulative impact of multiple cost components over time, rather than any single tariff line item.
Importantly, the findings signalled that KwaDukuza is no longer positioned as a cost-competitive alternative within the secondary city landscape and is increasingly aligning with higher-cost metropolitan environments.
This trend is said to present a clear warning signal where continued above-inflation increases in property rates and service tariffs, combined with relatively high development-related charges, risk eroding KwaDukuza’s competitiveness relative to peer municipalities.
If not carefully managed, this trajectory may begin to constrain new commercial and industrial development, reduce investment attractiveness, and ultimately slow economic growth, the report said.
While KwaDukuza continues to benefit from strong structural advantages, including rapid population growth, strategic location, and proximity to major logistics infrastructure, these advantages alone may not be sufficient to offset a persistently rising municipal cost burden.
According to the report's authors, these findings underscore the necessity of a more strategic and equitable framework for municipal pricing and development support.
By aligning cost recovery targets with the overarching objectives of fostering investment and development feasibility, KwaDukuza can better preserve its status as a premier and competitive hub for commercial property ventures.
Independent Media Property