Equality in Property Becoming a Reality

The recent celebration of South Africa’s twentieth year of democracy has brought issues of equality to the forefront for the moment. In some cases great progress has been made, in others not so much. When it comes to property ownership, which is still one of the measuring sticks used by South Africans, it would seem that the situation is becoming more equitable.  
The Rise of the Black Middle Class

The black middle class in South Africa is growing; in fact it has more than doubled over the last eight years, from an estimated 1.7 million people in 2004 to 4.2 million in 2012. These figures were recently released by the UCT Unilever Institute of Strategic Marketing as part of its “4 Million and Rising” report. 
In contrast the white middle class grew significantly less; from 2.8 million to 3 million suggesting a more equitable division of wealth is starting to take place. Whilst marketers scramble to meet the needs of the rapidly growing black middle class the question remains as to whether the growth of this segment of society is being reflected in the ownership of residential property.
Mortgage Indicators

Data released by Statistics SA indicates that 363 000 black South Africans had mortgages in 2011 and bond originator, Betterbond, believes that almost 50% of all home loan applications are now made by this group (as opposed to a meagre 12% in 2002). Georgina Alexander, researcher at the SA Institute of Race Relations, has stated that bonded home ownership serves as an important indicator of the middle class. “Based on the information we have available it would certainly seem that the black middle class is not only growing, but is also increasingly investing in residential property,” says Jan le Roux, CEO of Leapfrog Property Group.

The recent release of suburb specific details, as compiled during the 2011 National Census, reveals a positive trend. Dr Arulsivanathan Naidoo, the head of Stakeholder Relations at Stats SA, told The Mercury; "Since the start of our democracy until 2001, when the previous census was held, there was not much change in terms of migration patterns and suburb population dynamics. However, in the 10 years from 2001 until 2011, the last census, there has been a lot of change."

According to the data the traditionally white suburb of Kloof in Durban is an example of a nationwide trend; the growing black middle class has migrated into the area, now making up 54% of residents.

The 2013 Property Report issued by Lightstone indicates that black ownership of luxury properties (meaning those valued at R1.5 million or more) has also increased to 7.8%, up from 3.3 % in the last decade.  Andrew Watt, Managing Director of Lightstone pointed out to SA Commercial Property News that these statistics indicate that only 8% of an estimated 400 000 luxury homes available are owned by this group.
Economic Pressures Weigh Heavily
In fact Lightstone’s figures reveal that black ownership of the overall residential property market has only grown from 37% to 42% over the past ten years. “While these figures are certainly encouraging they do also highlight the fact that a fairly small percentage of the black middle class is purchasing homes”, believes le Roux, “The tough economic climate certainly has had a big impact but I think that certain affordable areas are by the stroke of a pen deemed too high a risk for lending purposes is a big part of the problem.”
Unilever Institute Director, John Simpson, issued a statement about the Institute’s report in which he indicated that 80% of the group they surveyed are tightening their purse strings and a further 22% admitted to struggling to manage their debt.
“It’s no secret that the average citizen is feeling the pinch due to the rise in costs, the current economic climate etc. Whilst it is very encouraging to see that the black middle and high income groups are investing in property, this trend will likely only increase as pressure on people’s incomes ease”, says le Roux, “that being said people need to take stock of their finances now; saving as much as possible if they are to be in a position to afford a home deposit anytime soon”.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 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.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us