A new report reveals that while the average house price in South Africa is in excess of R1 million, the majority of people live in homes valued at less than R600,000.
Data published this week by Ooba found that the average purchase prices of homes in South Africa is at R1 119 817, up from R1 057 176 in 2015.
For first-time house-buyers, the average purchase price is at R849 249, compared to R792 180 a year ago.
The numbers are similar to those released by financial institutions Absa and FNB.
Citing data from the Centre for Affordable Housing Finance in Africa – a UCT Unilever Institute study noted that the majority of the residential property market – 61% in 2015 – lived in homes valued at less than R600,000.
Of this, two thirds are homes that are valued at less than R300,000, the study said.
The UCT Unilever Institute Aspirations Report released this month – based on 8,000 interviews across five income groups – found that most South Africans were still part of the “missing millions” (pre-middle class), whose aspirations to break into the middle class were largely dependent on the quality of education and other economic drivers they could afford.
John Simpson, professor of advanced marketing at the UCT Unilever Institute, said all income groups in South Africa were facing an “unprecedented crisis of aspirations and income immobility” fuelled by the current economic, political and education turmoil rocking the country.
Asked what was holding them back from reaching their aspirations, UCT Unilever Institute said that these strugglers cited a lack of jobs, lack of assets which give them access to secured credit, black tax and lack of access to quality education.
Informal forms of finance such as borrowing from family and unsecured credit are used to fund the things that provide a bridge into the middle class, such as education, making home improvements in order to rent out rooms, buying a car in order to qualify for a better job, starting a small business from home, getting off the grid to become self-sustaining, and playing asset-catch- up including paying a deposit on a low-cost house, Simpson said.
The white middle class typically had access to generational property assets as security for loans, whereas most many in the black middle class were – relatively new to the middle class – first generation and trying to playing “asset catch-up”, and were therefore facing greater financial pressure.
The study revealed that only 12% of respondents relied on bank loans, 22% believed starting their own business would improve their fortunes. In a reference to so-called Black Tax 38% felt that family responsibilities were holding them back. Of all those who were self-employed, 61% said they were able to get by.
Only 15% felt that the country’s past were to blame for their economic woes (although surprisingly more whites than blacks felt this) and only 4,7% thought race relations was the most pressing issue in the country.