It seems that middle-class South Africans are now at last beginning to cut back on the money and time spent on ‘frivolous’ items, particularly holidays, and that this is being done in order to balance their household budgets and to protect their prime asset: the property that they are paying off.
South African property is still affordable to a fairly wide cross-section of population, including young people, even though there is still a very large segment which at this stage has no hope of becoming property owners, says Clarke.This is according to Tony Clarke, Managing Director of the Rawson Property Group, who says this has been established through discussions with many of the Rawson Property Group’s franchisees and agents.
“It is now clear that the reckless spending of yesteryear is being cut back, and South Africans are no longer quite as spendthrift as they were in the 2004 to 2009 boom era.”
Many of the younger generation had until 2009 never experienced a serious recession, and had ‘played the credit game’ recklessly, making maximum use of hire purchase, credit card and access bond facilities, he says. In the process many got seriously into debt, from which they are still struggling to emerge.
Now, Clarke says there appears to be a welcome return to a more responsible approach to household financing and the cut back on holidays, especially overseas holidays, augers well for the future.
“For the man-in-the-street, the 7% to 8% annual rise in property values makes property probably the best investment available, and it is one of the very few which can be done on borrowed (bank) capital.”
Furthermore, he says it has to be pointed out that in contrast to many of the more successful European countries, South African property is still affordable to a fairly wide cross-section of the population, including young people, even though there is still a very large segment which at this stage has no hope of becoming property owners.
As recent spokesmen for the state have pointed out, Clarke says the consequences of people reaching middle age without owning their home and having to continue to pay rent puts a serious strain on any national economy’s budget.
It is therefore, essential, that home owning be fostered, he says.
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