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'We can't give free houses to everyone'

Cape Town - 160810 - National Association of Realtors (NAR) 2016 President Tom Salomone addresses a crowd about the importance of home ownership. Picture: Kurt Engel

Cape Town - 160810 - National Association of Realtors (NAR) 2016 President Tom Salomone addresses a crowd about the importance of home ownership. Picture: Kurt Engel

Published Aug 11, 2016

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Cape Town - Although the government has reached its RDP target of providing 1 million houses in five years, housing is expensive and the focus needs to shift towards the affordable or "gap" market.

This is the view of Human Settlements MEC Bonginkosi Madikizela, who delivered a keynote address at the Institute of Estate Agents of South Africa/National Association of Realtors Property Update at Lookout Hill, Khayelitsha on Wednesday.

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Madikizela said the Western Cape's population had increased by 38.8 percent between 2001 and this year, accounting for 11.3 percent of South Africa's total population.

"Free housing as a response to housing need, is financially unsustainable and the focus must change to those who can contribute financially towards their own housing."

He said despite high unemployment, the Western Cape had about 593 000 households earning between R3 500 and R15 000, families fitting into the "gap" or affordable housing sector.

"It costs around R220 000 to build one house which we give free to people who qualify. We know that the economy of South Africa is not growing fast enough, and on the other hand we are not tapping into a culture of saving. The thinking that we can just give a free house to everyone must come to an end."

He said some of the challenges facing the "gap" or affordable housing market included credit worthiness, affordability, reduced income earning capacity, increasing property prices, rapid population growth and infrastructure challenges.

About 45 percent of the 23.11 million credit active consumers in South Africa had impaired credit records, the major reason why banks declined bond applications.

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National Association of Realtors president Tom Salomone spoke of the importance of home ownership.

"It is more than just having a roof over your head. One of the most important aspects of home ownership in South Africa is how it affects children."

He said research had shown that home ownership raised educational outcomes for children and that homeowners spent more money on improving their homes than people who rented.

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"Home-ownership builds stronger families. People who are home-owners report higher life satisfaction, self esteem and control over life. Home-ownership creates jobs."

Salomone said of the 5 million properties sold in the US last year, about 90 percent were sold by estate agents.

"Real estate continues to be and will always be human-centric."

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Cape Argus

ITsS YOURS, FOR ALWAYS: National Association of Realtors 2016 president Tom Salomone believes in the importance of home ownership. Picture: Kurt Engel

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