CAPE
PROPERTY WEEKEND ARGUS – OCTOBER 2024
FROM a shack to a formal home: without a title deed this process is almost impossible. | VINCENT LALI/BIGGER THAN ME MARKETING AGENCY
CLIMBING SOUTH AFRICA’S PROPERTY LADDER Accessing the bottom rung to economic freedom still, however, eludes many VIVIAN WARBY
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N A small office in Khayelitsha a woman is poring over some documents. The documents belong to another woman who bought a home informally, paid cash for it with money she had diligently saved as a nurse over the years, then she renovated the small place, adding on rooms and renting them out. She now wants to get the title deeds for the property into her name but is being told by the original seller, who still has the title deed, to pay him more money since the property is now worth more. It’s a dire situation and the woman’s life savings, which she ploughed into fixing the property, are threatened. This is one of thousands of
stories that the team at the Tenure Support Centre in Khayelitsha, whose main job it is to solve the title deed problems through legal formal channels, hear. Some people wait up to 20 years to get the title deeds in their names. This means that the home has to be traded informally and for cash, often at well below market value, or it sits as dead equity unable to be traded in the formal sector. It also means that these homes cannot be used as collateral. Sadly, people at the lower end of South Africa’s property market, because of issues such as lack of title deeds, among others, just can’t get their foot on the formal property ladder to use their homes as viable assets, earn a sizeable income and return from their bricks and mortar and
build generational wealth for their families. If they could, the results would be bigger than any broad-based black economic empowerment (B-BBEE) project to date to create wealth for South Africans left out of the economic fold, say the experts. The situation, however, is bad, with many RDP and other homes lacking title deeds. While the RDP homes are seen as subsidised homes, as soon as they are sold they become part of the affordable housing market, broadening supply to this sector where it is in critical need. The market is thus further stymied by laws that prohibit the selling of RDP homes for the first eight years. Some homes are also being built and renovations done without approved plans - you can’t get
approval to build without a title deed - putting this market further out of the formal structures where these properties could realise their true value and where there could be economic progress. All these stumbling blocks also keep the market out of formal financing. Players in the sector say the government and many big players just don’t see the lower end as part of the property market even though the affordable market makes up well over 70% of the entire property market. The informality is well and good until someone disputes ownership, and many have lost their hard-earned homes because of this. Yet the government is missing out on what could be their biggest B-BBEE effort to date - giving people at the lower end of the
property market, through better laws and title deeds, the right to use their homes as an asset and accumulate wealth, says housing specialist Kecia Rust, executive director and founder of the Centre for Affordable Housing Finance in Africa (CAHF). Property economist Professor Francois Viruly, who has spent over 25 years in the analysis of the South African property market, says “a lot of value is sitting in these segments of the property market that is just not being unleashed”. Rust says that what the government’s housing policy fails to do, and continues to fail to do, is engage with the housing market. Rust has been working in the sector since the early 1990s.
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