Property & Wealth

Will townships save the property market?

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Just as media headlines began to question whether the SA Property market had peaked, news fresh out is that there’s a “Property boom in the townships”.

The so-called inequality gap (measured by the geni coefficient) of South African society seems to be matched by the massive disconnect between the first and third (or informal) world economies. The two ‘economies’ merrily run parallel with each other throughout South Africa.

The headline from the Cape Times of 30 March 2016, quoted above, only serves to underscore the almost surreal contrasts between these diverse and often neighbouring economic zones.

In the southern suburbs of Cape Town a perfect example of these different mini economies is to be found in Muizenberg. The ‘first world’ of the Capricorn Industrial Park and the residential node of Marina da Gama serve as sources of enterprise and work for the ‘informal’ societies residing in Vrygrond and on the fringes of Lavender Hill. These bustling communities are only divided by the strip of tar road that is Prince George’s Drive and a 50-meter-wide servitude registered in favour of the City for – yes you guessed it – widening the road.

What then, in reality, is the basis of this gap?

These socio-economic aberrations are not necessarily the by-products of apartheid and are certainly not unique to South Africa, or Africa for that matter.

Like in other BRICS and EU countries, these living conditions are clearly and causally linked to the present trend toward rapid urbanisation. And regardless of where it takes place, it invariably, in the early stages of the process, causes poverty, informal settlements and social unrest.

Even when the formal economy conducts a census, as it did nationally in 2011, to in essence assess population distribution and movement, it somehow and quite bizarrely, overlooked, in the Western Cape alone, over 100 informal settlements which went unaccounted for.

And for the record, there are presently an estimated 2 225 informal settlements – which are seven times more than the 300 informal townships identified in 1994.

This oversight would be funny were it not for the serious consequences that befall those communities that disappear from the radar and go un-catered for in the national, provincial or local authority budgets.

That, in turn, impacts directly on the lack of essential services like education, health, roads, sanitation, waste collection and the rest, often leading to huge frustration, loss of hope and social eruptions, experienced daily across the length and breadth of the land.

Informal settlements often miss the boat

The Argus recently reported that several of these Cape settlements were established pre-2011, but were never formally recorded or registered, not even as temporary settlements, by the Cape Town City Council.

As a result, the residents live in abject squalor within the boundaries of a thriving and well-funded Metro. These communities live without formal electricity, sanitation, telephones and water and the other essentials of civilised society and become, for obvious reasons, hotbeds of social discontent.


The consequence for the local and provincial governments are equally damning. They are held responsible by the media and opposition parties for the mess and, more importantly, for not having catered for those communities in the infrastructure budgets allocated by the national government for clinics, housing, schools and more – a vicious cycle indeed.

Silver lining

Happily, the First Quarter 2016 ends with a silver lining

“Huge demand for housing” is how the Cape Times introduced its lead article, referred to above.

It is based on reports by local estate agents in Cape Town’s bustling townships, of the growing clamour for housing in a market that is currently reaching the unheard-of price levels of R750 000 to R910 000 in Mitchells Plain alone.

Notwithstanding a history of dispossession, these black, coloured, Indian and Khoisan communities have continued to build thriving communities, joining the mainstream economy to benefit from the wealth created by the sale and purchase of housing which remains in high demand.

These are great examples of post-1994 socio-economic development and attest to an entrepreneurial zeal which spills over into successful social transformation. Some older property owners are cashing in on their investments and can now afford to move ‘upwards’ into more affluent city suburbs. Others are taking out second bonds on their homes to expand them and benefit from the increased demand for secure and central accommodation.

Demand certainly will not let up as we enter the Second Quarter

The Financial Mail recently indicated that the ever-ambitious department of Human Settlements aims to provide an additional 364 000 fully subsidised housing units and over 55 000 finance-linked individual housing subsidies this year.

While this is a highly commendable goal by government, we need to encourage the private sector to jump on board to invest on a large scale to meet the insatiable demand for housing.

According to the SA Institute of Race Relations our housing backlog is in the region of two million units, which is up somewhat on the deficit of 1.5 million houses estimated in 1994!

by Eve van Basten

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