30 Jul 2012
Residential property ownership in South Africa is one of the few economic sectors that resembles the equality the country has aspired to since 1994.
This is according to Jan le Roux, chief executive officer of Leapfrog Property Group, who says this is so although no one can deny that there is still a lot of economic inequality in the country.
Le Roux notes that never one to shy away from the limelight President Jacob Zuma had many South Africans up in arms recently when he stated that “the ownership of the economy remains primarily in white hands as it has always been” during his opening speech at the opening of the African National Congress’ policy conference.
Debating whether this statement is accurate when applied to the economy in general is an arduous task best left to economists and politicians.
There is, however, one section of the economy where the claim can be easily debunked – that of the residential property market, he says.
South Africa has a high ownership rate of 62 percent - higher than Germany or the UK.
According to economist Mike Schussler, as quoted in the Mail and Guardian, black South Africans own 41 percent of all residential property, whites 43 percent, coloureds 9 percent and Indians 7 percent (it must be noted that these statistics define a house as a formal structure, a shack or a traditional dwelling).
He says according to the 2001 Census conducted by Statistics South Africa, black South Africans occupy the highest percentage of house/brick structures on a separate stand or yard in all provinces except the Western Cape (though these statistics don’t indicate whether these structures are rented or owned).
This group also leads in terms of flat occupation in most provinces.
While the fact remains that the number of black people living in informal settlements far outstrip that of any other group in the country, the numbers do indicate that the trend is shifting.
Research by mortgage originator Betterbond indicates almost 50 percent of all home loan applications are now being made by black people – as opposed to 12 percent in 2002.
Le Roux laments the fact that so many black South Africans have been saddled with bad credit records, often through inexperience.
“This coupled with the fact that certain affordable areas are by the stroke of a pen deemed to be a high risk for lending purposes still has a huge negative impact.”
According to the South African Institute of Race Relations one of the possible explanations for this shift in home ownership is the fact that the percentage of adults with the lowest living standards has dropped by 77 percent over the last decade.
In fact the report indicates that: “over the same period, the proportion of adults in the top three LSM categories, LSMs 8 to 10, has increased by 25 percent.
In 2001, 16 percent of adults were in LSMs 8 to 10, while by 2010 this had increased to 20 percent, or one in five adults.”
It is no secret that the previously disadvantaged racial groups in South Africa have increased both their wealth and spending power.
While these figures by no means mean to imply that the majority of people living below the breadline in this country are not from previously disadvantaged groups, they do point to a growing African middle class.
Lucy Holborn, research manager at the Institute, is quoted as saying that while there are still notable racial discrepancies in 2001, Africans made up 99.7 percent of those in LSM 1, but only 3 percent of those in LSM 10.
In 2010 Africans made up 98 percent of those in LSM 1 and 19 percent in LSM 10.
This African middle class, while still relatively small, is growing and importantly, investing in real estate.
Betterbond statistics show that black buyers – who are often also first-time buyers – now account for between 37 to 39 percent of home loan approvals per month.
“This is incredible growth but there is still a long way to go.
“One does wonder if government cannot do more to make affordable land available near business areas for lower income housing as that is where the demand is.”
He says Leapfrog Property Group, the only majority black owned national real estate group in the country finds these figures illustrated in their areas:
Johan van Schalkwyk, principal of Leapfrog Roodepoort, notes that his office has seen an increase of black and Indian buyers in the R400k to R800k market – specifically in Florida, Witpoortjie and Discovery.
“I would say that about 90 percent of the affordable market in this area is owned by previously disadvantaged races as well as almost 70 percent of the properties in the R1.5 to R2 million price bracket,” says Chantler.
This trend in property ownership seems to be growing in the south of Johannesburg as well. “We’re definitely seeing an increase in black buyers in the R1.2 to R1.5 million market, specifically in areas such as Mondeor, Mulbarton, Suideroord and Winchester Hills.
Another area that’s seeing a change in terms of property ownership is Bloemfontein.
Wynand Liebenberg, principal of Leapfrog Bloemfontein says they are definitely experiencing an increase of black buyers in the R800k to R1.3 million market mainly due to the number of state employees purchasing property in this segment of the market.
House for sale in Fraaiuitsig R 1 330 000
House for sale in Fraaiuitsig R 930 000
Apartment / Flat for sale in Port Elizabeth Central R 550 000
House for sale in Erasmuskloof R 2 795 000
Apartment / Flat for sale in Corlett Gardens R 590 000
House for sale in Doringkloof R 1 850 000
House for sale in Kleinvlei R 399 000
House for sale in Lynnwood R 2 850 000
House for sale in Kwaggasrand R 1 460 000
House for sale in Voelklip R 3 800 000
If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.
For the best browsing experience update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.
Please contact our Customer Service Centre for further assistance. Tel. +27 (0)861 111 724