Real Estate Investor Magazine South Africa Real Estate Investor Magazine - July 2017 | Page 35

A United Nations (UN) report has projected that by 2030, urban areas will house 60% of people globally and that one in every three people will live in cities with at least half a million inhabitants. In South Africa, Johannesburg is expected to be amongst the world’s top ten megacities in the next 13 years. What’s more, Cape Town is expected to have a population of 4.46 million by 2032. More needs to be done Despite rapid developments in South African cities, housing solutions have predominantly been provided at the lowest and uppermost ends of the market - leaving households in the middle without an entry point into the urban property market. “An unfavourable situation exists in the housing sector, whereby the government is required to cater to the needs of people falling in the lower end of the income bracket ( R30 000), with no one catering to those in-between,” says Rashiq Fataar, Director of Future Cape Town. The middle-income market - which have a total household income of R15 000 to R45 000 - therefore face tremendous pressure (financial and otherwise) in trying to access housing opportunities, particularly in well-located areas within the country’s cities. This group also falls outside of the gap and social housing market (R3 500 to R15 000), and therefore cannot access government subsidies or support. Rob McGaffin, a town planner and land economist, adds: “The housing sector is not delivering adequate stock at the rate and scale needed, nor is it serving the diversity of the market given varying levels of affordability and access to credit.” As a result, middle-income groups are either forced to rent, or opt to buy property in the outer suburbs where housing is cheaper but where they are unable to access shared public assets. Moreover, they lose out on the savings from massively reduced transport costs, not to mention time that could be spent on other activities. The way forward In response to the demand from this inc