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30 Jan 2013

Home Buying Racial Demographics

Property News

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Since 2005, the total percentage of White suburban home buyers has been higher than other racial groups, according to the FNB Estate Agent Survey Q4 2012.

The report reveals that racial breakdown in 2012 for suburban home buying was estimated at 50.8 percent for White buyers, 29.5 percent for Blacks, Indians/Asian (11.3 percent) and Coloureds (8.8 percent).

The report reveals that racial breakdown in 2012 for suburban home buying was estimated at 50.8 percent for White buyers, 29.5 percent for Blacks, Indians/Asian (11.3 percent) and Coloureds (8.8 percent).

Although the percentage of White buyers has dropped from 53.8 percent in 2011 to 50.8 percent in 2012, White buyers continue to dominate other races in suburban home buying.

In 2005, this figure was sitting at (57.0 percent), 2006 (56.8 percent), 2007 (55.8 percent), 2008 (50.0 percent), 2009 (50.3 percent) and 2010 (50.5 percent).

Black buyers in 2005 accounted for (23.0 percent), 2006 (24.0 percent), 2007 (25.3 percent), 2008 (30.0 percent), 2009 (29.5 percent), 2010 (31.3 percent), 2011 (26.8 percent) and 2012 (29.5 percent).

Meanwhile, the percentage of Indian/Asian buyers saw an increase and dip between the periods recording 12.0 percent in 2005, 11.5 percent in 2006, 11.5 percent in 2007, 12.3 percent in 2008, 13.0 percent in 2009, 11.0 percent in 2010, 12.3 percent in 2011 and 11.3 percent in 2012.

Of all the racial groups, Coloureds saw growth remain in single digits percentage growth recording 8.0 percent in 2005, 7.8 percent in 2006, 7.5 percent in 2007, 7.8 percent in 2008, and remained unchanged at 7.3 percent in 2009 to 2011 and in 2012 saw growth of 8.8 percent.

Writing in the report, FNB household sector and property strategist John Loos says since 2005, they have seen the estimated total percentage of Black, Coloured and Indian buyers in these “suburban” areas broadly rising.

From 43 percent in 2005, the percentage of buyers from these three “previously disadvantaged groups” rose to 50 percent of total buyers by 2008.

Thereafter, a sliding economy saw this percentage declining down to 46.2 percent by 2011, he explains.  

Loos points out that this is to be expected, as a higher portion of the previously disadvantaged race group buyers are new entrants, have limited wealth yet built up, and are thus more income, employment and credit dependent than many of the older white repeat buyers.

“In 2012, we saw a rise in this percentage to 49.2 percent of total suburban buyers, implying white buyers dropping back a little to 50.8 percent from 2011’s 53.8 percent.”

The bank believes this to be the lagged impact of a better performing economy since the end of the 2008/9 recession, along with lower interest rates, an effect which has also led to an improved first-time buyer percentage.

Looking at the results, he says the lesson is that the faster the country can grow its economy (in a sustainable manner of course), the more rapidly it can racially transform residential property ownership.

Loos says this was noticeable in the boom times up until 2008 and the country has made progress in racially transforming property markets.

He says that when the economy stuttered in 2008, estate agents started to suggest thereafter that the process had gone backwards a little, before 2012 saw the progress resume once more.

The report indicates improvement in residential property in 2012 in terms of demand and sales volumes as well as a steady improvement in home affordability since 2008 and improved first-time buyer activity in 2011 and 2012 estimated at 23 percent of total buyers. – Denise Mhlanga

About the Author
Denise Mhlanga

Denise Mhlanga

Property journalist at property24.com

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