The South African property sector holds about R4.9-trillion in assets, of which the residential sector accounts for about R3-trillion, or 75%, research by IPD South Africa, on behalf of the Property Sector Charter Council (PSCC), has shown.
The majority of privately held residential properties (almost 60%) fall within affordable areas, with the South African deeds registry indicating that 3.5-million of the total of six-million residential properties were valued below R500 000.
Formal dwellings comprise almost seven-million of the total housing market, including formal, informal, traditional and other, of 10.8-million units.
The research was carried out to assess the size and composition of the property industry in South Africa to measure the different services and activities within the sector, as well to determine whether the black economic-empowerment transformation figures were in line with the scorecard.
“The aim of the research is to create a consolidated body of knowledge about the property industry in order to foster a consistent understanding of the sector for the purposes of measurement and evaluation of a number of transformation charter imperatives,” PSCC chairperson Musa Ngcobo said at the launch of the research report in Sandton.
The report, which provides a snapshot of the property sector at the end of 2010, placed emphasis on the sectors or segments where the greatest activity existed, namely residential and commercial property ownership.
The research found that the nonresidential property sector, which comprised retail, office industrial, hospitality, leisure and other was valued at about R780-billion.
Also speaking at the launch, banking firm Absa property assessment specialist Mashilo Pitjeng noted that the most challenging part of the research was in sourcing information from the public sector, which was valued at about R570-billion.
“Although we have worked with the Department of Public Works in the national segment of public property, which is valued at about R188-billion, we found that the reliability of information gathered from provincial government and local government was questionable.
“Trying to find reliable information which was relevant and updated was much more difficult than the [commercial and residential] sectors and we had to work with the best information we could source, which is why we ended up going through the six sources of information,” he noted.
This included the municipalities of the City of Johannesburg, City of Cape Town, Ethekwini, Tshwane, Ekurhuleni and Buffalo City, which together with the estimate of the some-200 district municipalities, equated to about R37-billion in property holdings.
Further, the research estimated that State-owned enterprises added about R6-billion to the equation.
“This report represents the start of an ongoing process and would be presented to industry as a working document. We encourage participation and collaboration from the property sector to not only strengthen the data contained in the report, but also to develop future updates,” IPD research director Jess Cleland concluded.
Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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