Are we doing better than we thought?


I believe that property ownership is an important source of start up and expansion funding for many kinds of enterprises. Authors like Prahalad and De Soto have written extensively on the importance of recognising property as an asset class that allows all kinds of enterprises to bloom.

An article in Fin24 caught my eye this morning. It is about research conducted by the credible economist and researcher Mike Schüssler into property ownership in South Africa. The research shows that black ownership of properties have increased significantly, with 41.7% of primary residential ownership in the hands of black owners. The governments housing programme has contributed to this market, and have assisted many people to own their first property. The report also seems to show that commercial banks have recognised the growth potential in this market, and have assisted with loans to first time and second time buyers. What I find interesting is that the research shows that 31.7% of black home owners also owns a second property, and that 260 000 black households were currently partly living off rental income. Wow, there is an interesting market for you.

Although there are still huge differences in the values of the properties, having something small that belong to you and that has value is probably underestimated.

Are we doing better than we thought? I know that the government is not satisfied with many low cost houses, but I still think that we need to give the government credit here for starting a process that has created a huge asset base in the black communities. Another related question is whether banks are maybe more helpful than we thought. It seems to me that there are a huge number (more black than white) bondholders in the current market. Yes, I know the whites are the minority, and yes, there is still a lot of room for improvement. But please pause for a moment and reflect on how far we have come!

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