select
|

Housing and the wealth gap in South Africa

Any discussion on low cost, subsidised housing in South Africa has to take into account one startling fact: South Africa has the worst Gini coefficient in the world, according to Bill Rawson, chairman of the Rawson Property Group.

The Gini coefficient is described in The Economist article as an aggregation of the gaps between people’s incomes into a single measure.

Thus, if everyone in a group (or for that matter in a country) has the same income, the coefficient will be 0. If all the income goes to one person and none to the rest, the coefficient will be 1.

“Speaking generally, the fewest income equalities are found in the richest countries.” Sweden, Germany, Britain and the USA have coefficients of between 0.25 and 0.4.

However in South Africa, the figure stands at a very high 0.62, indicating that probably nowhere else in the world are so many people privileged and relatively comfortable while others live close to or below the poverty line, says Rawson.

“Throughout South Africa we have seen the emergence of a new middle class in the last two decades, and this has been widely reported.

“We tend to forget that many people, as the striking Platteland farm workers have recently shown, are still having to try and exist on incomes of R50 to R100 per day, if they have jobs, which around 30 percent do not.”

In this predicament, Rawson says the call for a much faster delivery of housing becomes more urgent.

We are told that South Africa needs at least 1.6 million new low cost homes right now and these have to be treated as a top priority, even if borrowing money to build them causes a further increase in our debt, he points out.

Rawson says The Economist article draws attention to the fact that the ongoing worldwide protests against inequalities are now a fast growing movement, one which is unlikely to die down.

India’s ruling class and MP's are now facing class protests as never before and this is not surprising seeing that the country now has 48 dollar-billionaires but 70 percent of its people live on less than two dollars a day.

Similarly in the USA, the Occupy Wall Street campaign, although it ran out of steam, was motivated by a distaste for the rich’s ability to grow richer, while others do not. (There are now 421 dollar-billionaires living in the USA), he says.

“Those who think that the calls for a leveling off of wealth distribution will ‘go away’ are likely to find that from now on they will, in fact, increase in strength and will have to be accommodated for.

“We can only hope that they do not wreck the economy in the process as they did previously in Argentina and Chile.

“In this situation a massive focus on low cost housing delivery and improved services coupled with the stricter enforcement of service payments, is absolutely essential as a remedy to discontent.”

Rawson adds that he accepts that there are other priorities, particularly job creation, better education and skills training.

However, housing has to be one of those at the top of the list and it is encouraging that the new Minister of Human Settlements appears to recognise this.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
        
    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