Diversity returns to suburban properties
The percentage of black, coloured and Indian homebuyers in apartheid-era white suburban areas has started to increase again after peaking at 50 percent of total buyers in 2008, and declining thereafter because of the impact of the economic recession caused by the global financial crisis.
John Loos, a household and consumer sector strategist at FNB, said yesterday that the percentage of homebuyers from the three previously disadvantaged groups rose to 49.2 percent of total suburban buyers last year.
Loos said this implied that white buyers as a percentage of total purchasers dropped back a little to 50.8 percent from 53.8 percent in 2011.
"We believe this to be the lagged impact of a better performing economy since the end of the 2008/09 recession, along with lower interest rates - an effect which has also led to an improved first-time buyer percentage," he said.
Loos said the racial breakdown for suburban home buying last year was estimated at 8.8 percent for coloureds, 11.3 percent for Indians, 29.5 percent for black Africans and 50.8 percent for whites.
These estimates are based on the perceptions of estate agents in the FNB estate agent survey for the fourth quarter of last year.
Loos said the survey question about the estimated percentage of buyers by race was introduced in 2005, and had revealed that the estimated total percentage of black, coloured and Indian buyers in these formerly white suburban areas was broadly rising.
He emphasised that FNB's survey was dominated by the "high volume" apartheid-era white suburbs and transaction volumes could, therefore, still be expected to be dominated by the so-called white population group and "indeed this is still the case".
Loos said the proportion of buyers from the three main previously disadvantaged groups had risen from 43 percent in 2005 to 50 percent of total buyers in 2008, but a sliding economy saw this percentage decline thereafter to 46.2 percent by 2011.
"This is to be expected as a higher proportion of the previously disadvantaged race group buyers are new entrants, have limited wealth yet built up, and are thus more income-, employmentand credit-dependent than many of the older white repeat buyers," he said.
Loos said the simple lesson from the survey results on the racial breakdown of buyers was that the faster the economy could grow in a sustainable manner, the more rapidly it could racially transform residential property ownership.
"This was noticeable in the boom times up until 2008. We've no doubt made progress in racially transforming property markets. But when the economy stuttered in 2008, estate agents started to suggest thereafter that the process had gone backwards a little before 2012 saw the progress resume once more."
Loos added that the results of the improved economic performance and some years of affordability improvements could be seen in the improved ability of new entrants to enter the residential property market.
The FNB estate agent survey had pointed to some years of improved first time buyer activity, with first time buyers estimated at 23 percent of total buyers in 2011 and last year compared with the low of 15 percent in 2008, Loos said.
Posted at 08:45AM Jan 29, 2013 by Editor in Market |