Johannesburg - More than half of South Africa’s six million residential properties registered in the Deeds Office are worth less than R500 000.
Currently, 3.5 million or 58% of these properties fall in the so-called affordable category – properties under R500 000 – 47% of which are in former townships.
This emerged from new data from the Affordable Land and Housing Data Centre (al+hdc), which was announced on Wednesday.
This data centre is an initiative by the FinMark Trust, Urban LandMark, Lightstone and Eighty20.
It is aimed at a comprehensive analysis of the market for affordable housing.
Although this market provides the overwhelming majority of accommodation in the country, it's the market about which the least amount of information is available.
The al+hdc is a database of properties in 2 400 residential areas, where the average property is worth under R500 000.
At current mortgage rates this housing would be affordable for households earning less than R16 000 a month – 88% of the country's population.
This type of accommodation includes existing houses in former coloured, black and Indian townships, housing subsidised by the state, and new housing being developed by the private sector.
The affordable housing market is the market that is growing the fastest in terms of volume and value.
More affordable homes worth less than R500 000 are being built each year than the more expensive houses.
Since 2004 an average of 70 000 new affordable units, including state-subsidised houses, have been registered at the Deeds Office per year, compared with 65 000 in the category of houses costing more than R500 000.
Although fewer new houses in the above-R500 000 market have been built since 2007, the figures have remained constant in the affordable housing market.
As far as housing finance is concerned, banks are very active in the affordable market – and the four big banks have taken the lead.
Absa has the biggest market share in terms of the number of mortgages granted to buyers in the affordable market, followed by Standard Bank, Nedbank and First National Bank (FNB).
But Standard Bank has the biggest market share based on the value of the properties, followed by Absa, Nedbank and FNB.
In all, 45% of properties worth between R250 000 and R500 000 in the affordable areas are financed by mortgages, compared with 63% of properties in the same price class in residential areas where the average price is above R500 000.
- Sake24
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