Ten years ago, a survey by Reader's Digest revealed that 65% of South African consumers were in favour of home ownership. According to the latest statistics, nothing much has changed since then - except the size of the population.
So says Rudi Botha, CEO of BetterBond, who notes: "The latest homeowner sentiment survey conducted by Absa shows that a comparable 67% of SA consumers are currently positive about the benefits of owning a home rather than renting one. But the population of SA has increased from 49.5 million to 56.5 million over the past 10 years, so the actual number of people in favour of home ownership is now considerably higher than it was then.
"Meanwhile the most recent General Household Survey (GHS) report released by StatsSA shows that only about 53.5% of SA households actually live in their own homes (ncluding those who live in traditional rural homes). Another 8.8% of households are partial owners, while 24.7% are tenants in formal homes and 13% live in informal structures."
Opportunity for real estate industry
There is thus a huge opportunity, he says, for everyone involved in the country's real estate industry, including agents, banks, developers and originators, as well as the Department of Human Settlements and municipalities to close the gap between those who own a home and those who would like to own one.
"Given that there are currently around 16.2 million households in SA, these stats show that there are currently at least 2 million of them that would like to own a home but don't yet. And enabling them to do so has the potential not only to add trillions of rands directly to the fiscus, but also to create literally millions of jobs - and a stream of ongoing revenue."
Calculations by the US National Association of Home Builders (NAHB) show that for every apartment built, at least one permanent job is created either in construction or in "support sectors such as building and housing product manufacturing, transport, and professional services like banking, architecture and real estate.
"And every single-family home that is built yields almost three permanent jobs, so addressing this home ownership gap could go a very long way towards solving our unemployment problem - and boost VAT and income-tax collections."
Boosting local economies
What is more, Botha says, a higher rate of home ownership could generate an enormous amount of badly needed revenue for local authorities and local economies. "The NAHB figures show that over their lifetime, single-family homes generate the equivalent of at least R500,000 each just in local property taxes, while apartments add around R200,000 each to municipal incomes. In addition, homeowners tend to spend their disposable incomes close to home, and this supports local businesses and service providers.
"Consequently, we would like to see a focus in the coming year on getting the housing subsidies that have been provided for in the national budget actually into the hands of potential home owners - thousands of whom will then be able to access home loans and afford to purchase their first properties."
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