The Property Sector Charter Council (In South Africa) commissioned a research project in 2013 to discover the size of the country’s property sector. Simply put – they wanted to know this:- How Big Is The Property Sector in South Africa – really?
Hold on to your seat, here are the results.
The South African property sector is worth a whopping R4.9 trillion according to this a new study.
Only around 1% of land in South Africa is urban and residential, according to the research. Over 73% of land is South Africa is natural pasture. Around 12% of land is agricultural, and about the same portion comprises nature conservation’s and reserves.
The study also shows nearly two thirds of property owned in South Africa, estimated at R3 trillion, is residential. Commercial property carries a value of some R780 billion.
Undeveloped land zoned for development equates to R520 billion. Publicly owned property – including national, provincial and local government as well as state-owned enterprise – totals around R570 billion.
Currently, the research combines various studies that estimate the size of South Africa’s residential market.
While the number of housing units – formal and informal – vary in the source studies, from 13.1 million dwellings to 8 million, value calculations are all estimated at similar levels of R3 trillion.
Of the R780 billion commercial property in South Africa, the research reports corporate property accounts for R600 billion, including investment property of R120 billion held by South Africa’s listed property sector.
Further investment property, held by life and pension funds and private equity funds, totals R180 billion.
Retail property has the highest value of the commercial property sectors in South Africa at R340 billion, followed by office properties at R228 billion and industrial properties at R187 billion.
Representing a small comparative value of R25 billion is hospitality, leisure and ‘other’ property.
For publicly owned property, the study used available information, which reflects R342 billion of property held by provincial government, R188 billion by national government, R37 billion by local government and R6 billion by state-owned enterprises.
So, what about the future in the Residential Property Market? Will it recover?
Yes, we all know it had it had its ups and downs in recent times however, after a 4-year slump it appears that the housing market has finally turned the corner. In fact, latest data from banks, mortgage originators and estate agents suggests a recovery is already under way.
The price index breached 10% growth in the first quarter of 2013, a level at which it has remained.
So it seems that the timing is perfect for investors to re-evaluate their property investment portfolios.
In short it is time to buy property again!
The South African Chamber Of Entrepreneurs (SACE) just launch a project to help you cash in on the Trillion Rand Business . It is called the T&T Real Estate Online Business Opportunity OR the Real-T Project for short.