With “freedom” in the spotlight as SA headed to the polls this week, the question frequently arises as to how this translates for the individual in everyday life.
“The concept of freedom only really becomes tangible to most people when they are also free in financial terms,” says Rudi Both, CEO of BetterBond, which is SA’s leading bond originator, “and we believe that one of the most important measures of such freedom is individual home ownership.
“And this is not just about the freedom from paying rent or not having to worry about being forced to move at an inconvenient time. A home of your own also symbolizes the fact that you are free to work, to spend or save your money as you please, and to build up your personal wealth.
“By extension, a high rate of homeownership is indicative of an economically-free society where investment, job creation and prosperity are on the rise and in which tax revenues can also increase to fund the ongoing improvement of health and other social services, access to education and protection of the environment, for the benefit of everyone in that society.”
Owning a home, he notes, enables the individual to use it as collateral to raise money to start a business, invest in more property or pay for further education for themselves or their children. “It is thus the cornerstone of personal wealth for most people and ensures them of a more secure old age. It can also be left to their heirs as a valuable inheritance – the kind of ‘start’ in life that all too few of SA’s young people now have.”
This is one of the reasons, says Botha, why BetterBond supports Khaya Lam, the national initiative started by the Freedom Foundation to ensure that all existing land and home owners in South Africa actually have a title deed to their property.
“At the moment, StatsSA figures show that about 10m of the 16,2m households in SA live in homes that are owned or partly-owned. However, as many as 5m of these households do not have a title deed – and thus effectively have no guaranteed tenure of their own properties.
“They still live with the constant threat of eviction and dispossession, even from houses they have built themselves or council houses their families have lived in for decades, and they cannot sell and transfer these properties, use them as collateral or will them to their children. We really want to help change that situation.”
Meanwhile, he says, the creation of new homes to house the estimated 2m households still living in informal structures should have the support of all South Africans – not least because of the job-creation potential of residential construction.
“International statistics show that for every apartment built, at least one permanent job is created either in construction or in ‘support’ sectors such as building and housing product manufacturing, transport, and professional services like banking, architecture and real estate. Every single-family home that is built yields almost three permanent jobs, while more homeowners would also mean more revenue for SA’s cash-strapped local authorities.
“Over their lifetime, single-family homes are estimated to generate at least R500 000 each just in local property taxes, and apartments to add around R200 000 each to municipal incomes. In addition, homeowners tend to spend their disposable incomes close to home, which provides support for local businesses and service providers.”
Taking all of these benefits into account, says Botha, the answer to the question about how freedom translates into real life is easy: “Freedom is, quite simply, a home of your own.”
