Black luxury ownership soars

Growth among black owners in the luxury property market has soared over the last 10 years, but this change is yet to be reflected in the rest of the property market, according to data collated by Lightstone.

The 2013 Property Report by Lightstone, a provider of comprehensive data, analytics and systems on property, automotive and business assets, found that black ownership of the overall South African residential market has only grown from 37 percent to 42 percent over the past 10 years.

Andrew Watt, Managing Director of Lightstone, says that while the profile of black property ownership in South Africa has changed over the last ten years; this adjustment has not been as dramatic as many would have expected, with the property market slump having affected sentiment.

"Despite this, it is interesting to note that black ownership in the luxury property market (properties valued at R1.5-million or more) has more than doubled over the same period to 7.8 percent from 3.3 percent. This is clearly attributable to the increasing spending power of the middle to upper income black consumer; however, it should be noted that this originates from a small base where the volumes remain marginal.

"For example, in 2003, only 3.3 percent of luxury properties were black owned and, while that figure has more than doubled over the last 10 years, it still means that less than eight percent of these approximately 400 000 luxury properties are owned by black people."

Watt says that while growth in the black market is noteworthy given that the general property market has slowed down significantly since 2008, it is clear that this slowdown has also had a marked effect on the level of black ownership.

"Looking at the market as a whole across all races, it is interesting to note that female-only ownership has increased over the last 10 years — even slightly outstripping male-only ownership. As a result, the market is now fairly evenly divided between female-only, male-only and properties co-owned by both genders.

Lightstone notes that the highest levels of female-only ownership are seen in the black community, while the Asian community has the largest levels of co-ownership. When excluding the affordable/township market, female-only ownership within the black community is in line with trends seen in the white community.

The accessing of finance in housing also revealed some interesting trends, with black home owners in the R250 000 plus market being slightly more likely to access finance than owners of other race groups.

"Black owners that do bond also tend to bond for a higher proportion of the purchase price (92 percent) than white owners that bond (83 percent)," revealed Watt.

"The South African property market has been through a difficult period over the last five years but it is heartening to see that even with the introduction of the National Credit Act, and more stringent lending conditions, we are continuing to see transformation in the owned-property market," concludes Watt.

Article by: www.iafrica.com

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