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Tuesday Jan 21, 2014

Less than half of buyers in suburbs are white

The racial transformation of suburban residential areas has progressed well, with white buyers making up less than 50 percent of residential buyers for the first time last year, according to FNB.

White buyers last year accounted for an estimated 48.5 percent of total purchases in suburban residential areas from the estimated 57 percent in 2005, when FNB first introduced this question into its quarterly estate agent surveys.

Black African buyers last year increased their estimated percentage of total residential buying in suburban areas to 31 percent from 29.5 percent in 2012 and 23 percent in 2005.

John Loos, a household and property sector strategist at FNB, said yesterday that this represented 'a significant cumulative shift' from 2005.

The estimated percentage of Asian and coloured buyers has remained relatively stable since 2005, rising to 8.5 percent last year from 8 percent then for Asian buyers, while for the coloured buyers it was unchanged at 12 percent.

But Loos said the slow pace of South Africa's economic growth, which translated into nearly zero growth in employment numbers over the period to late last year, was one key constraining factor on the pace of racial transformation in the residential market.

However, Loos said that despite slow economic and job growth, FNB would expect to see a further mild increase in the percentage of previously disadvantaged buyers this year as the transformation of the economy continued.

He said that racial transformation of all areas of the economy had been high on the government's policy agenda over the past two decades.

To track how the residential property market was doing in this regard, FNB included a question in 2005 about the racial composition of home buying in the highly traded suburban areas that were once classified as 'white' areas in the apartheid area, he said.

Loos said that the further increase last year in the percentage of buyers from previously disadvantaged population groups was reflective of two major factors.

He said employment equity legislation had to be one key driver of more rapid growth in numbers of previously disadvantaged individuals entering the labour market. Loos said that it had been well documented over the years that the disposable income in these groups had been growing at a faster rate than in the white population group.

He said that a second key contributor was the ageing nature of the white population group, which meant the pace of homeowners from this group exiting the market was probably accelerating over time.

Business Report


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