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Can Western European Home Ownership Products Bridge the South African Housing Gap?

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Abstract

Subsidised housing often creates a segmented housing market, with some home owners falling into a gap between the subsidised and non-subsidised types. This gap particularly affects middle-income buyers, whose income may be too high to qualify for subsidy but too low to buy a non-subsidised house. Western Europe has policies and affordable products to bridge this gap. In this paper, based on a literature review and 15 interviews with South African policymakers and representatives from the financial sector, we assess whether the Western European products have potential in South Africa. We find some obstacles—differences in macro-economic context, the fact that South Africa seems to be locked into a capital subsidy policy pathway, the lack of a suitable regulatory framework and institutional problems at the local level—but also some potential in the form of alternative tenures and innovative housing finance in the areas of mineworker housing, inner city housing and social housing.

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Notes

  1. The text in this section is based largely on Elsinga et al. (2015).

  2. This paragraph is based largely on Hoekstra et al., 2010.

  3. This section is almost completely based on Elsinga et al. (2015).

  4. This section is based largely on Homes and Communities Agency (2014).

  5. This section is based largely on the French government website http://vosdroits.service-public.fr/particuliers/F10871.xhtml.

  6. For details of the interviewees, see the list at the end of the paper.

  7. At the time of writing, January 2016, the rand was trading at 15 rand to the US dollar.

  8. The expanded definition includes those who have given up on looking for employment.

  9. The police killed 34 mineworkers in a shoot-out.

  10. The terms of the buy-back are not very clearly specified.

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Author information

Authors and Affiliations

  1. Delft University of Technology, Delft, The Netherlands

    Joris Hoekstra

  2. Centre for Development Support, University of the Free State, Bloemfontein, South Africa

    Joris Hoekstra & Lochner Marais

Authors
  1. Joris Hoekstra
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  2. Lochner Marais
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Corresponding author

Correspondence to Lochner Marais.

Additional information

Interviewees

D. Gardener – Housing finance expert (Gauteng)

C vd Bijl – Developer (Free State)

M. Mokoena – Representative from local government (Free State)

T. Stewart – Private-sector housing developer (Eastern Cape)

J. Pienaar – Housing finance institution (Gauteng)

M. Pillay – Representative from local government/housing finance institution (Gauteng)

D. Swart – Estate agent (Free State)

J. Wessels – Private-sector housing developer (Free State)

L. Beukes – Estate agent (Gauteng)

W. van Emenis – Housing finance institution (Gauteng)

Five representatives from commercial banks who asked not to be named (Gauteng)

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Hoekstra, J., Marais, L. Can Western European Home Ownership Products Bridge the South African Housing Gap?. Urban Forum 27, 487–502 (2016). https://doi.org/10.1007/s12132-016-9279-7

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  • DOI: https://doi.org/10.1007/s12132-016-9279-7

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