South Africa’s black middle class is growing by leaps and bounds - with a new survey showing it now outspends the white middle class. This is having a profound impact on the historical black township of Soweto where prices of land and houses have soared in recent years due to growing demand for better housing.
, an extension of Soweto, is designed to accommodate the needs of the black middle class. It has all the same features as the housing of choice of most well-off South-Africans: you need a special permission to enter the premises; it is guarded 24/7 by a private security company; it is surrounded by a tall electric fence; and its common areas boast neat lawns.
Not what you would expect to find in the township of Soweto - where many of Johannesburg’s poor black population lived in shacks and segregated from whites under apartheid.
But because it is Soweto - the prices are still lower than other housing estates in and around Johannesburg and currently within reach of middle income families. The 91 homes here cost a mere $35,000 apiece. And they have been purpose built for people like Kabelo Mengy Mokoatle, a math teacher, who belongs to South Africa’s burgeoning black middle class.
“I was interested living in the complex because of the security. As I'm a single parent I want to make sure that my son is protected if I'm not around," said Mokoatle.
Upgrade in lifestyle
Themba Mtambo, 42, bought his 48 square meter house two years ago for his family of five.
He grew up so poor in rural KwaZulu Natal province that he had to wait until he was 12 years old for his parents to be able to buy him his first pair of shoes.
As a project manager in a water supply company, he says he can now afford an upgrade in his lifestyle.
“Where I bought first, you find there are a lot of lower class people or whatever. And then you find that, if you want to think of moving in the line of business, you don't find people who are at the same level as you are. So I moved here, and most of us, if not all, are professionals," he explained.
From a desolate place synonymous with violence, poverty and political unrest, Soweto is slowly becoming a real city of two million people shared by shack dwellers, white collar workers and even a few millionaires. The Protea Glen neighborhood, which lies on its outskirts, started being developed in the 1990s as an alternative for the middle class. Today, the average household here earns about $1,200 a month.
Supply and demand
Peter Kalabane, who mans the local office of its development agency, Township Realtors, says that it is the last area where land is still available in the sprawling township.
"The future is bright," he said. "Unfortunately there is no more land to continue in the next five years or so. It will be filled up in the next 3 years.”
Because of high demand coupled with land scarcity, home prices in Soweto are one of the fastest growing in the country.
The financing issue
Johann Grobler, who developed the Protea Glen estate, says that providing affordable housing for the growing middle class, which cost between $20,000 and $50,000 dollars a unit, is a challenge.
"It is definitely very difficult to produce houses, decent houses, in this price range," said Grobler. "I think however that the biggest challenge we have has to do with getting finance for those people. In South Africa 49 percent of the people have a bad credit rating at the moment, which makes it very difficult for people to get loans."
But banks are not to blame, says Nicholas Nkosi, head of the affordable housing division in Standard Bank, which owns a third of the mortgage market in the country.
"It's a question of financial literacy, how do we get people to save? It's almost like a cultural shift that needs to happen in South Africa," he said.
"I don't think it's the banks that don't want to lend. In order for the banks to lend, there's got to be a house. So what it will take will be the availability of land, of well-priced land.”
People in the black middle class still own far less, per capita, than their white countrymen. They are too rich to qualify for government-subsidized housing, but too poor to afford living in the affluent suburbs at the other end of the city.
Accommodation for them remains a challenge.