A paycheque is not wealth’
- 13 May 2010
Renewed economic growth and job creation is of course very welcome as SA recovers from recession, but more and more South Africans are coming to realise that a paycheque does not equal wealth.
“And they are increasingly turning to the property market for answers,” says Hano Jacobs, CEO of the Realty 1 International Property Group.
“Large numbers of South Africans are now looking beyond the conspicuous assets that a regular paycheque can buy, like clothes and cars and holidays, and seeking to turn at least some of their earnings into savings or assets that will appreciate in value and benefit them in future.
“And research shows that the top choice of investment for most of them is a home of their own – which is why the new mortgage guarantee fund just instituted by the Department of Human Settlements is so important.”
The R1bn housing surety fund, he explains, is specifically intended to assist prospective homeowners earning between R3500 and R9000 a month to obtain home loans from the banks.
“These consumers have been in a Catch-22 situation for years – earning too much to qualify for RDP houses, but too little to raise home loans in the formal market. However the new fund should break the logjam, and we expect to see thousands of salaried employees such as teachers, nurses and police personnel, for example, becoming homeowners in the near future.”
The growth of housing demand in the emerging middle class, Jacobs says, can be seen in the latest statistics from First National Bank, which reveal that black buyers now account for 34% or just over one third of all residential property purchases, compared with 28% just a few months ago.
“This purchasing power should increase even more with the new guarantee fund in place and bodes extremely well for the healthy expansion of our property market over the next few years – and the creation of wealth that is the real essence of economic empowerment.”
Issued by Realty 1 International Property Group