Latest news with #R26
IOL News
21 hours ago
- Business
- IOL News
South Africa's housing crisis: over 80% of households unable to afford local properties
South Africa contends with a housing affordability crisis. Image: Rob McGaffin An overwhelming majority of South African households are currently priced out of the local property market, and this trend is worsening. 'There's something very wrong if such a large demand is not being met and, although the problem is well known in the property industry, no real solutions are forthcoming from the government actors who are responsible for solving these problems,' says Renier Kriek, managing director of innovative home finance provider, Sentinel Homes. He says the root causes are mainly systemic and need to be addressed by the government. It is simply not acceptable that the country has added close to 20 million inhabitants in SA, but the economy has managed to produce a mere 1.9 million homes. In its June 2025 Property Newsletter, automotive and property data provider Lightstone reports that only one formal house exists per 3.3 families, who earn less than R26 000 per month. This accounts for more than 80% of South African households. Sentinel Homes said not only are there not enough houses, but new developments are victims of rising construction costs, making each generation of property less affordable to consumers than previously. The home finance provider said property prices have been outpacing wage increases for the past 70 years, not only in SA but in most of the world. Earlier this year, this publication reported that the take-home pay of only 15.8% of South Africans would be sufficient to be able to afford a property of R1.3 million in value. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Following last year's BankservAfrica Take-Home Pay Index (BTPI), Elize Kruger, an independent economist, said according to the calculations of an estate agent, for a salary earner to afford a property of R1.3 million in value, with a repayment of R13 480 per month over 20 years, based on the prime rate of 11%, the gross income per month of such a salaried person must be R40 000. She said that, assuming an effective tax rate of 23.1% (for an annual income of R480 000), that translates into a net salary/take-home pay (after income tax) of approximately R30 000. Kruger said these numbers are based on a single income per household, so when assuming that two incomes are used to finance a property. Add to this trend, Sentinel said South Africa's flaccid economic growth, resulting in low job creation and low wage growth, made it easy to see why affording a home is becoming harder and harder for low to middle-income earners. Data analysed by Lightstone showed that there was one property for 4.8 households earning under R13 000 a month. The ratio improved to 3.3 households for every one formal property if the salary threshold moved to R26 000 a month, said Hayley Ivins-Downes, the managing executive for real estate at Lightstone Property. For higher income groups, this ratio was closer to 1.2 to 1. The property market intelligence provider said there were nearly 12 million households earning less than R13 000 a month, with just under 2.5 million properties available if households stuck to the guideline that they spend no more than a third of their income on housing. Kriek said that certain things need to change outside the property market before problems can be tackled from within, says Kriek. He said South Africa sorely needs economic growth driven by a consistent economic policy. Not only graft but also mismanagement of state and parastatal finances needs to stop. 'For example, paying CEOs of dysfunctional utilities more than the Prime Minister of the UK is wasteful and robs citizens of funds that could go towards housing,' says Kriek. He said the country needs structural reform that embraces deregulation, labour market reforms, trade liberalisation, privatisation or public-private partnerships, and tax reforms to encourage infrastructure investment. This may also require currency devaluation, which is a difficult political proposition and is unlikely to be popular with richer consumers. The MD lamented the fact that artisans are retiring faster than they can be replaced, which puts upward pressure on housing production costs. Most of South Africa's workforce is not well-suited to its services-oriented economy. It needs to reindustrialise to create jobs for the skills we have, encouraging technical trades, such as plumbers or electricians. He added that the country's restrictive labour policies make labour much more expensive than in competing economies, such as Bangladesh or Sri-Lankha. This could be resolved by devaluing the currency or reducing imports, or simply by liberalising labour laws. That might mean workers are paid less, but that more people will have jobs as a way of creating an economy that works for all – and this would be a temporary situation that will correct itself as more jobs are created. 'Making such changes at a national level will ensure that problems in the property market are not intractable,' says Kriek. 'But these necessary reforms will also go a long way toward rejigging the economy generally for the better.' Inside the property market, Kriek said several problems are making housing construction more costly and therefore less affordable when properties are sold. He said this was bureaucratic sprawl, NIMBYism (Not In My Back Yard), fixed charges, small unit avoidance, slow land release, lender and landlord protection. Sentinel said if 80% of South Africans cannot afford a home, and developers are unwilling to meet the demand, something is terribly wrong. It said this was not an innovation or economic problem but a systemic one that the government needs to rectify. The problem is market design, and that is something for which we rely on government, and for which the political will must exist to take some tough decisions, he said. 'The private sector is profit-driven and the demand clearly exists, so it's up to the government to create the incentives and ease the restrictions that prevent the private sector from earning its bread in the provision of affordable housing,' says Kriek. 'There's more than enough money floating around – government just needs to create a market that provides incentives for the available resources to flow to where the demand already exists.' Independent Media Property
IOL News
17-07-2025
- Business
- IOL News
South Africa finalising R54 billion loan package with World Bank, KfW, and African Development Bank
The International Monetary Fund has also recommended that South Africa reduce its debt-to-GDP ratio to 60% to align with international standards. The announcement comes amid growing concerns over the country's escalating debt levels. South Africa's debt-to-GDP ratio has grown from 23.6% in 2008/09 to a projected 74.7% in 2024/25. In an interview with Bloomberg Television on Thursday, Godongwana said the funds will support municipal projects and performance-related initiatives aimed at improving service delivery and strengthening local government operations across the country. Finance Minister Enoch Godongwana has revealed that the government is managing a loan package totalling about R 54 billion from international lenders, including the World Bank , African Development Bank, and KFW. Godongwana explained that this is not a single new loan but rather a package made up of multiple loans from different development partners. 'We're dealing with another one now, which is supporting performance-related for municipalities. Again, it's a consortium of the World Bank, the KFW, the African Development Bank, all of them coming together to put up a loan for us,' he said. He added that the total loan amount, in rand, is expected to be about 54 billion, and that the funds will likely be disbursed in stages, with some going directly to municipalities and some allocated as a policy loan to support broader reforms. 'I think in Rands overall, the total loan is going to be about 54 billion. I suspect it's going to be staggered because some of it is going to be going into municipalities. Some of it is in what is called the policy loan." The announcement comes barely a month after the World Bank approved a $1.5 billion (R26 billion) loan to support the country's "key reforms aimed at making the country's infrastructure more efficient and sustainable." According to the bank, the loan also aims to address South Africa's twin economic challenges of low growth and high unemployment by easing infrastructure constraints in the energy and freight transport sectors. IOL Business Get your news on the go, click here to join the IOL News WhatsApp channel
IOL News
17-07-2025
- Business
- IOL News
Transforming Pretoria West: How the City of Tshwane plans to reclaim properties for economic growth
The City of Tshwane team led by Mayor Nasiphi Moya targets illegal tenants in Pretoria West for urban renewal. Image: Supplied/City of Tshwane The City of Tshwane plans to lease reclaimed buildings in Pretoria West to legitimate businesses following the eviction of tenants with unpaid bills in a bid to stimulate economic growth and promote spatial justice before the Tshwane Investment Summit in September 2025. The move follows the City's recent issuance of eviction notices to illegal tenants occupying municipal buildings in the area, who owe over R26 million in unpaid rent for 12 properties and 35 stands. Visiting one of the properties that had been illegally occupied for years, Mayor Nasiphi Moya said the City envisions Pretoria West as a thriving manufacturing hub. She noted that the building had been occupied by these individuals for years without the City collecting rent. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ 'We have not been getting money for electricity and water and our people have not been using it to build their businesses,' she said. Kholofelo Morodi, mayco member for Corporate and Shared Services, said the city's Bad Buildings Committee has included the Pretoria West Precinct in the urban renewal strategy and investment readiness initiative to reclaim hijacked buildings. The urban renewal strategy seeks to revitalise neglected areas, safeguard municipal assets, and establish zones ready for economic development. Morodi described the high-impact operation in the Pretoria West Precinct as a success, underscoring the city's commitment to urban renewal, protecting assets, and investment readiness. 'This city-owned precinct had been unlawfully occupied by individuals without valid lease agreements or documentation. In addition to structural neglect and non-payment for services, authorities uncovered a network of illegal electricity connections — posing severe fire hazards and threatening to overload the grid, with implications for citywide energy stability and public safety,' she said. She explained that the operation forms part of the committee's mandate to systematically reclaim and reintegrate hijacked, misused, and unsafe assets into formal urban development frameworks. 'Pretoria West Precinct is one of many strategic properties the city will be securing and restoring to operational dignity. These buildings are not abandoned — they are being repositioned to fuel inclusive growth, job creation, and spatial justice ahead of the Tshwane Investment Summit in September 2025,' she said. She said the operation was carried out lawfully and peacefully, with coordination among key departments, including group property management, group legal, the city manager's office, and the Tshwane Metro Police Department, among others. Morodi said: 'The Pretoria West Precinct now forms part of Tshwane's broader Urban Renewal Strategy — a transformative blueprint to activate neglected urban spaces, safeguard municipal assets, and prepare spade-ready zones for catalytic development.' She vowed that the city will continue to step up multi-faceted operations across all seven regions, reclaiming hijacked infrastructure and transforming it into secure, functional, and economically thriving areas for everyone. In a recent operation, the city targeted a property housing over 20 shacks, where tenants were paying R1,500 to R2,000 per room. The city also issued bylaw contravention notices for two properties and had previously fined a nearby scrap yard dealership for constructing a wall that exceeded height limits without approval.
The South African
14-07-2025
- The South African
Wrongful death trial begins for ex-KZN rugby player killed by police in Hawaii
The civil trial into the death of former KwaZulu-Natal rugby player Lindani Myeni began on Monday in Honolulu, over three years after he was fatally shot by police in the US state of Hawaii. Myeni, 29, originally from Empangeni, was unarmed when he was shot four times during a confrontation with police officers in April 2021. At the time, officers claimed they were responding to a 911 call reporting a suspected burglary. Myeni's widow, Lindsay Myeni, an American citizen, has filed a wrongful death lawsuit against the City and County of Honolulu, alleging that police officers failed to identify themselves and that their actions were racially motivated. Despite public pressure, prosecutors declined to charge the three officers involved, citing that their use of deadly force was justified. The trial proceeds after the Honolulu City Council opted not to vote on a proposed $1.4 million (R26 million) settlement, following objections from local law enforcement. According to local outlet Honolulu Civil Beat, the council's decision was delayed after Honolulu police officers expressed strong opposition to the payout. The case has drawn attention both in the US and South Africa, reigniting debates around racial profiling, police accountability, and justice for victims of police violence. Myeni was a father of two and had settled in Hawaii with his family before the fatal incident. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
10-07-2025
- Business
- IOL News
Former Sasol employee disputes R1. 8 million payout 10 years after retrenchment
A former Sasol employee took Old Mutual to the Financial Service Tribunal to dispute the R1.8 million pension payout. Image: Pexels A former Sasol employee took Old Mutual to the Financial Service Tribunal (FST) to dispute the R1.8 million payout he received after his retrenchment in 2015. Thabiso Sehlabaka worked for Sasol from 1988 until he was retrenched in 2015. Initially a member of the Sasol Pension Fund, Sehlabaka transitioned through the Sasol Negotiated Provident Fund before finally migrating to the Old Mutual Superfund. Following his retrenchment, in April 2015, Sehlabaka received over R1.8 million after tax deductions. Four years later, in November 2019, he received an additional sum of R26,777 from the Unclaimed Benefits Preservation Fund, but it was only in August 2024, that he raised concerns about his payout. He lodged a complaint with the Pension Funds Adjudicator (PFA) as he was dissatisfied with his payout. Unfortunately, in December 2024, the PFA declined to investigate his complaint, finding it time barred. The setback did not deter Sehlabaka, who filed an application for reconsideration with the FST in February 2025. He argued that he only became aware of potential discrepancies in early 2024, leading him to assert that his complaint was still within acceptable time limits. His dissatisfaction stemmed from claims of insufficient compensation after 27 years of service, discrepancies in years of service accounted for, and pivotal issues regarding taxation. Sehlabaka alleged an incorrect South African Revenue Services (SARS) tax deduction of R15,000 that he claims remains unpaid and is owed to him. Furthermore, he claimed that he never consented to his exit from the Sasol Negotiated Provident Fund to Old Mutual's Superfund. He was also dissatisfied with the overall benefit amount received after 27 years of service. Moreover, he said some years of service were not accounted for. However, Sasol clarified that Sehlabaka was not required to opt into the Superfund, as this was accomplished through a Section 14 Transfer. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ Presiding over the tribunal, Advocate Salmé Maritz examined the case and found Sehlabaka offered insufficient reasons for the nine-year delay in raising his concerns. Maritz noted that the allegations of incorrect tax deductions and unaccounted service years were vague and unsupported, lacking any new factual basis that could not have been unearthed with reasonable diligence. Regarding the disputed R15,000 tax deduction, Maritz clarified that this amount was lawfully deducted in accordance with the Income Tax Act and specified that Old Mutual was mandated to remit taxes to SARS prior to disbursing any funds. "The Superfund (Old Mutual) is legally required to deduct and pay this tax to SARS before making a payment. The Superfund cannot refund lawfully deducted tax to the applicant (Sehlabaka). If the applicant disputes the deduction or believes it wasn't paid to SARS, he must raise it with SARS," added Maritz. Consequently, Sehlabaka's application was dismissed. IOL News Get your news on the go, click here to join the IOL News WhatsApp channel
