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If you listened to your parents (though what did they ever know!), the first thing you truly needed to own in your lifetime was a house. Buy a home, and you\u2019re set for life, they told us.<\/p>\n
Well, that\u2019s no longer true. Look around Joburg and you\u2019ll see thousands of \u201cFor Sale\u201d signs, many of which tell a tale of lost capital and thwarted expectations. This is somewhat different in Cape Town, of course, where if you\u2019d owned even a parking space a decade ago, you\u2019d be a multimillionaire \u2013 but it\u2019s a complexion evident in most other parts of the country.<\/p>\n
This speaks to the grim reality that the homeownership dream in South Africa has been, if not entirely broken, severely undermined. Buying a home, even to rent it out, is no longer a no-brainer \u2013 as Vernon Wessels\u2019 incisive take on the issue today illustrates.<\/p>\n
There are many factors behind this, of course. But if you\u2019re looking for one group to blame, it is the kleptocrat-minded extraction force that would prefer to be known as our \u201cmunicipal officials\u201d.<\/p>\n
Take the City of Joburg, for instance, where transparently clueless officials have blithely raised rates every single year to pay its power, water and sanitation departments, which have roundly failed to do their jobs. These rate hikes have been unjustifiable, given the parlous service delivered, and have acted as a major disincentive to buy property.<\/p>\n
If you knew, for instance, that you\u2019d be on the hook to pay municipal rates which are soaring at vastly more than inflation, this changes the economics of home ownership. And, of course, it doesn\u2019t help that you\u2019re being asked to pay these rates to subsidise a city workforce that, were it actually deceased, might do less damage. Paying to see a clown is great if you\u2019re going to a circus, but not so much when these are the people who are meant to be running the city on which your future wealth depends.<\/p>\n
Until South Africa has a proper exorcism of the deathly-useless municipalities which have only served to erode property values over the past decade, the value proposition of home ownership remains uncompelling.<\/p>\n","protected":false},"excerpt":{"rendered":"
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