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Home ownership high but many are "matchboxes"
About 62% of South Africans own their own homes, one of the highest rates in the world according to Mick Schussler, chief economist of economists.co.za. He says that while this figure had dropped from 70% a few years ago it was still significantly higher than in Germany or Britain.
Schussler stressed that many of the homes owned in South Africa were not true private sector assets but rather "matchbox houses" that had been given to people by governments over the years.
Referring to the rental market, Schussler said that the formal rental market comprised 1,6-million homes and 75% of these were rented at rates of less than R3 000 a month. He says only 400 000 homes in South Africa were rented for more than R3 000 a month.
He says the average net return on residential property was just under 6,3%, a little more than putting money in a bank where it would earn 5,5%. However, the capital growth for owners of rented properties was significant over time.
Read the full article on Business Report.
