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 Feb 2018
      Given the hand they were dealt, government has performed a delicate balancing act which it is hoped will serve to reignite confidence in investment in South Africa, regain our global credibility and satisfy the credit ratings agencies, says Dr Andrew Golding, chief executive of the Pam Golding Property group.
    • 21 Feb 2018
      The real estate mantra, ‘location, location, location’ remains a strong market influence regardless of the prevailing economy, with suburbs like Rondebosch enjoying the buffering benefit of being ideally situated.
    • 21 Feb 2018
      These days most buyers are using online property portals like Private Property when house hunting due to the convenience, up to date information and variety on offer. “The property portals have revolutionised the way buyers shop, but they do need to be cautious – viewing photos online is no replacement for viewing the property in person,” says Bruce Swain, CEO of Leapfrog Property Group.
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
    • 20 Feb 2018
      A major shift in the ageing paradigm has precipitated an equally dramatic transformation in the retirement sector, with modern accommodation options worlds away from the conventional model.
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
        
    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