The truth about land and home ownership in South Africa

 ·23 Feb 2016

Changes in property ownership in South Africa have been nothing short of dramatic in the last two decades and is one of the biggest success stories, but is never brought to the fore, economist Mike Schussler told Fin24.

“The economic question is: who would lose the most if land was nationalised or who benefits from the very old slogans that have never been tested by data in the first place?” he asked.

In his view, tensions are increased and laws debated on things, which current evidence suggests are no longer true.

“Again, the questions of who benefits from pronouncing land reform a failure and who benefits from the racial tensions, clearly show it would not be the country or any of its people,” said Schussler.

“Nobody ever seems to have checked the total number of private houses built. Strange that, with so many statements made, no-one puts facts out there which are readily available on a government agency website.”

Schussler said he wonders why these “dangerous slogans” are allowed to persist.

“Less tension will create better understanding and opportunities for all. It will promote growth and help.”

With about 15.6 million households in South Africa at present, and the number of households having grown faster than the population for some time now, it is clear that between 38% and 46% of households live in homes that have been built since 1994.

“With white families only making up 10% of all households, they could not be living in all the new houses built – even if not one of them had their own house in 1994, which was certainly not the case,” explained Schussler.

“Since 1994 the private sector in the bigger municipalities has constructed 1.625 million residential buildings and that alone is more than the estimated total number of white households of 1.62 million.”

Even going as far as to assume no whites had a house in 1994 and no white families rent – actually 180 000 do and some stay with family for free – the number of houses built since 1994 cannot be for whites, said Schussler. He, therefore, challenges allegations that whites own 80% of the land and blacks 20%. Yet, despite the data changing, the slogans do not.

“These statistics also do not include places like Bushbuck Ridge or Thayandou where tens of thousands of new homes have been built by people themselves. It does not include construction at Nkandla or on other rural and tribal land,” said Schussler.

Furthermore, apart from the 4 million so-called RDP houses government has built since 1994, there are many that had been built in places like Diepsloot and Orange Farm without approved building plans they are therefore not counted.

“Conservatively, over 6 million new homes have been built in South Africa and many older homes have seen transfer of ownership. At the top end of estimates – including tribal and rural land the number could even exceed 7 million,” said Schussler.

Other statistics in 2013 show there are just over 6.1 million residential places that can be sold – not including RDP houses, tribal property, shacks or public housing estates. In Schussler’s view even just this huge number of houses built must have had a massive impact on ownership in SA by race. This change has not only been regarding the value of property, but also the land ownership.

Even a conservative approach to Statistics SA’s Household Survey of 2014 seem to indicate that Africans now claim to own about 52% of the land that households claim to own if measured by size of the property.

“This must be a very huge success for government, but it is a success they do not lay claim to,” said Schussler.

“Whites own about 47% of the land by size and Asians and coloured groups about 1% between them. They are seemingly more under-represented when it comes to the size of land and racial ownership than either whites or Africans,” Schussler pointed out.

Another way to view land or property ownership is to look at the value people give to their land. Here another success story becomes apparent, in Schussler’s view. Again using data from the general household survey of Statistics SA, he said it is clear that the majority of first owned properties is African owned. Moreover, more than ten times the number of Africans stated that their formal property is fully paid off compared to whites.

“Twice the number of Africans still have to pay off their property to a financial institution compared to whites, but it is not four or five times more like some would have you think,” said Schussler.

“More whites and Asians – as a percentage of their populations – rent their properties than either coloureds or Africans. So the picture is completely different to what the majority of people think it is.”

According to Stats SA, 94.2% of second properties are owned by Africans, and this is also the case regarding second brick dwellings.

“So, second dwellings generally would actually push the African total share of the value of properties up to closer to 60% or so – even assuming most are in the far flung places,” said Schussler.

“Less than 4% of all second properties belong to whites and it may be that some whites and indeed Africans have third or fourth properties, but this question is not asked. But clearly the domination of Africans in the question of second properties leaves no doubt that Africans are now the majority owners of property in SA.”

Schussler admits that whites as a group are very small in the overall population and are still over-represented as owner-occupiers, but they certainly are no longer the majority owners and they do not own 80% of the land.


More on land ownership

Now may not be a good time to sell your house in SA

We are coming for white institutions in 2016: EFF

How much your house is worth heading into 2016

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