select
|

Why we need a master plan for property owners

South Africa needs a multifaceted effort to solve the housing crisis that threatens to overwhelm the country.

So says Rudi Botha, chief executive of mortgage originator BetterBond, who says of the 14.5 million households recorded in the latest census, at least half live in homes they do not own. Some live in accommodation provided by employers, some in rented homes and backyard shacks and more than 1.3m in squatter camps.

"No one has actually quantified how many millions of people this involves but clearly it is a recipe for serious political and economic instability," he says.

All over the world, says Botha, it has been proven that home ownership has a stabilising influence because it pulls people out of the poverty trap and provides the basis for individual financial security and wealth creation.

"Home ownership is at the heart of a healthy community and... research has shown that it is also a major influence in lowering crime rates, substance abuse rates and teenage pregnancy rates.
"But the reverse is also true when the ownership of even a modest home becomes increasingly beyond the reach of ordinary, hardworking families - and totally out of the question for the poor. People lose hope, and their protests at the unfairness of their situation are apt to become increasingly violent."

Botha says the problem is too big for any one player to solve. The government, banks and the private sector needed to get moving on a unified plan to get all South Africans properly housed.
"The banks, for example, are being hamstrung by the imminent implementation of the Basel III banking regulations, which provide for them to hold much bigger reserves on long-term lending like home loans and will almost certainly result in them pulling back on home loans.

"So perhaps it is time for Treasury or the Reserve Bank to reassess those regulations now and evaluate whether they are actually appropriate for South Africa."

On the other hand, he says, household debt levels are too high - and getting higher because of the ease with which consumers can get unsecured short-term and personal loans at high interest rates.

He says banks need t o reassess their role in helping to create the situation in which so many people who earn enough to buy their own home can't qualify for a home loan because they have too much debt.

"Meanwhile, one might well ask what has happened to the g ap housing s ubsidy plan announced with such fanfare earlier this year?
"Similarly, where is the R1 billion mortgage default insurance plan that has been on the cards for several years now? Will there be a new tax incentive for developers of affordable housing in the next Budget, and will the Urban Development Zone tax incentive be extended?"

Big business and other employers could get more involved, Botha says, by helping to educate employees about the dangers of short-term lending and the advantages of saving towards the goal of home ownership.

"And in the provision of housing for those who are poor and unemployed, government should be actively seeking out and motivating the most capable developers and builders to do this at scale, on the understanding that such activity would also provide much needed employment and skills development."

There is a mountain to climb, he says, and consumers need to play a role in achieving their home ownership aspirations, whether they provide sweat equity in the construction process, perhaps, or have earnings from which they can save for a deposit.

(Weekend Argus - Saturday Edition)


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
    • 20 Jun 2018
      The average size of bond granted in SA has grown 7,7% in the past 12 months to R934 000, according to BetterBond, the country’s biggest bond originator.
    • 19 Jun 2018
      In the current market, letting out a property can be a good option as rental demand remains strong, especially in the northern suburbs of Johannesburg. This is according to Chris Renecle, MD of Renprop. However he says that before homeowners let their property out, there are five key points they should make sure are covered before they market the property for rent and sign any lease agreements.
    • 19 Jun 2018
      The Capetonian dream is to live by the ocean with the iconic mountain making an appearance somewhere in the horizon. But, that dream comes with a hefty price tag that many simply cannot afford. But, should you venture some kilometres out of the city centre, entirely new realms of beachside bliss await you …
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK