A recent statement from Mike Bester, Chief Executive of Realty 1, warning that the average price of a home (according to one banks estimate) in South Africa is now R911 000, and will soon rise to R1 million and that at the average current bond interest rates of 11,25%, i.e. 1,25% below prime for most takers, a couple buying at this level must have a combined income of R35 000, could create a negative perception of 'the basically positive' housing situation in SA today. This was said recently by Tony Clarke, MD of Rawson Properties.
'It is true,' said Clarke, 'that the average home price has risen by almost over 50% in four years '“ but this has not really upset buyer confidence, nor has it, as yet, led to a big revival in the rental market as Bester indicates'
Current house prices, Clarke pointed out, do reflect demand.
'If people had not been willing to pay the higher figures, the rises would not have come about'
Clarke said that Rawson Properties experience, which, he said , has been corroborated by most of those with whom he has recently had discussions, is that South Africa has never before seen anything like the demand now being witnessed in the R400 000 to R700 000 home bracket '“ and this shows no signs of abating because a growing number of couples today earn the R13 000 to R26 000 combined salaries required to buy into this bracket '“ and there is still a relevant shortage of property in this price bracket. .
'A recent estimate by Rawsons head office researchers indicates that as much as 60% of Rawson Properties turnover is now being generated by homes with values below R1 million,' said Clarke. 'The housing market is, therefore, alive and well but the action and interest is now mainly at the lower end'
Clarke said that other recent press statements to the effect that the lower income group has a 'rental mentality' and has not yet learned to appreciate the virtues of homeownership are, in his opinion, 'way off the mark'.
'Again, this does not tie in with our experience,' he said. 'When Rawson Developers and Homebuilders launched their affordable 'Rondebosch Oaks' development in Rondebosch with average prices of R500 000, we were sold out in a matter of days. Some potential clients who missed the boat were literally in tears. The yearning to own rather than rent a home is strong throughout South Africa and is now becoming evident in the townships where a lack of documentation and legal papers has for years made investment in, and transfer of, homes difficult'
