Townships are 'dysfunctional'

Posted On Thursday, 15 July 2004 02:00 Published by eProp Commercial Property News
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One-fifth of all South African households live in what were formerly known as black townships and the housing stock here is now worth an estimated R60 billion or more.


Bill RawsonHowever the secondary residential property market in these townships is so "dysfunctional" that less than 15% of owners have thus far capitalised on their assets and very few have upgraded in the way that their white colleagues and counterparts do in the middle class suburbs of the big centres throughout South Africa.

This situation has been analysed and laid bare by a report published by several private enterprise and governmental bodies - the Finmark Trust, the Ford Foundation, the Micro Finance Regulatory Council, the S A National Treasury and the National Housing Finance Corporation.

All these bodies, said Bill Rawson, President of the Institute of Estate Agents, are aware that massive improvements are needed in the township property situation. The report, he said, draws attention to the fate of would-be homeowners in the townships - and suggests means to rectify the situation.

"The report," said Rawson, "showed that most of the problems arose from titling delays and clerical/legal inaccuracies. There have, it appears, been serious delays in land proclamation, the opening of township property registers and the processing of primary transfers. In May 2004 the "Registration of Real Rights in Land" programme initiated by the Surveyor General examined some three million title deeds right across South Africa.

They found that that 36% were unregisterable due to conveyancing errors, interdicts and other legal restraints."

The report, added Rawson, also showed that the township property owners' problems are made more difficult by the fact that most low income households are often unable to raise the money for transfers - for example R2,755 on a R50,000 property. The report also showed, he said, that their problems are exacerbated by the fact that very few qualified estate agents operate in the township private sub-market and by township dwellers' inability to qualify for mortgage finance. In general, said Rawson, it appears that only those with substantial wealth or buying with the help of their employers who guarantee their payments are able to achieve loans. The majority of township houses, he said, are still acquired simply through inheritance.

The report also, however, showed that the low cost secondary property market outside of the townships has been relatively successful, which, said Rawson, indicates that there is a strong desire among township dwellers to get a foothold on the property-owning ladder and that it is bureaucratic inefficiency and delays that are probably preventing them from doing this.

Referring to statements regularly made last year by himself on behalf of the Institute of Estate Agents, Rawson said that it must by now be absolutely clear that the success of South Africa's new democracy will depend on spreading the country's wealth more equitably among all its people – and this, he said, must involve the creation of a newly empowered skilled and semi-skilled lower middle class.

"For people entering this class," said Rawson, "property will always be their core wealth, probably their only significant asset. It is, therefore, absolutely imperative, as the Germans discovered after the war, to create a vibrant property owning/transferring sector in the townships and thereby stabilise the political and economic situation. I see no reason at all why within the next ten to 15 years precincts like Khayelitsha, Nyanga and Langa should not become thriving property markets. Already the improvements carried out in certain of these townships indicate clearly that the home owners aspire to a better lifestyle and are no longer happy with the small, ill equipped housing with which formerly they so often had to be satisfied."

Last modified on Tuesday, 27 May 2014 15:11

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