South Africa has not kept pace with the growth in both population and household volumes, and this presents vast opportunities for residential property stakeholders. These opportunities have been highlighted by the results of Statistics South Africa’s new General Household Survey Report, says Rudi Botha, chief executive of bond originator BetterBond.
The survey found about half of South African adults are single, with 95% of men and 86% of women under 34 never married and not living with a partner.
This means the rate of new household formation in the country – which usually happens as people move out of their childhood homes and set up their own – is growing at 2.4%, whereas the population is growing by only 1.3% a year.
The report says the number of households has grown from 12.8 million to 16.7 million over the past 10 years, with less than 40% consisting of families with four or more members. “Almost 26% (or more than four million) contain just one person, while 62% are composed of three people or fewer.
This means we are probably not only going to need a lot more homes built, but a lot more homes suited to young singles, single parents and single seniors.” Botha says while the number of households living in formal homes has increased by 5.5 million since 2002 to 13.5 million today, there has also been an increase in the number of those living in informal homes.
Almost 2.2 million households now live in informal homes. This means “there are vast opportunities for developers, builders, banks, investors, estate agents, originators like ourselves and many others in the residential property sector”.
Botha says the potential for job creation and empowering people to become homeowners is also huge. “Right now even the creation of more formal affordable rental accommodation would be a significant advance for almost one million households that currently rent informal homes.”
It would also create new opportunities for buy-to-let investors, although Botha says the survey shows this market is already fairly large, with about 3.4m households now occupying formal rental accommodation.