The racial transformation of South Africa’s suburban markets is continuing and 2013 could be the first year when the estimated percentage of white buyers in these areas drops below 50 percent of total buying.
The estimated percentage of black buyers may also be the highest yet.
FNB’s estate agent surveys for the first two quarters of this year reveal that an estimated 46.5 percent of total buyers were white, 32 percent black, 12.5 percent Indian and 9 percent coloured.
John Loos, a household and consumer sector strategist at FNB, said yesterday the racial percentages did not move dramatically from year to year but the change since 2005 – when a question on the racial classification of buyers was introduced to the bank’s estate agents survey – had become “very significant”.
In 2005, white buyers represented an estimated 57 percent of total buyers and black buyers only 23 percent, he said.
The further progress in the racial transformation of the suburban housing market should not come as a surprise, Loos said, given that for a long time data from Statistics SA and others had been showing the steady transformation of the labour market, and with it the narrowing of the income gap between race groups.
It was also notable that estate agents perceived more rapid change in home buying percentages in favour of the three previously disadvantaged population groups around times of more rapid economic growth, with transformation appearing to suffer a setback in stagnant economic times.
“Whereas in the economic boom years black group buying saw its estimated percentage of total buyers rise from 23 percent in 2005 to 30 percent in 2008, the lagged impact of the 2008/9 recession was a decline in this group’s percentage back to 26.8 percent in 2011.
“Then, in 2012 and the first half of 2013, it appeared to gather steam once more.”
Loos said the estimated pick-up in buying by previously disadvantaged groups following a considerable period of better economic times and low interest rates was not surprising.
Many people in these groups had less financial backing from older generations and this emerging middle class was arguably more dependent on a favourable economic and interest rate cycle to boost current income and access to credit compared with many older white group repeat buyers, who had already built up significant wealth, including the value of the homes they had sold in the past.
“Boosting economic growth through boosting the skills development sector and developing growth-friendly policies should therefore be seen as essential to housing market racial transformation.
“Stagnant economic growth periods have estate agents seemingly pointing to a slower rate of suburban housing market transformation,” he said.
FNB last week reported that the most important reasons for homeowners selling in the second quarter of this year were downscaling in line with a different life stage (21 percent), upgrading (19 percent), downscaling due to financial pressure (18 percent), change in family structure (12 percent) and moving for safety and security (10 percent).
Loos said selling to upgrade had become “very significant once more” following the lull in the 2008/09 recession but it had yet to exceed selling to downscale due to life stage changes.
He said life stage downscaling and downscaling related to financial pressure accounted for 39 percent of total selling.- IOL
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