Steve Tshwete – Mpumalanga

Working for integration Waterberg Dr JS Moroka Greater Sekhukhune Ehlanzeni District District District Elias Municipality Municipality Municipality Motsoaledi Thaba Thembisile Chweu Mpumalanga

Emakhazeni

City of N11 Tshwane Nkangala City of Tshwane District Metropolitan Municipality Municipality N4 Steve Tshwete

Albert Emalahleni Ekurhuleni Luthuli Metropolitan Municipality Victor Ekurhuleni Khanye

Gert Sibande District Lesedi Municipality

Govan Msukaligwa Mbeki

Dipaleseng Lekwa Midvaal Sources: Esri, USGS, NOA

Steve Tshwete – Mpumalanga

Housing Market Overview Human Settlements Mining Town Intervention 2008 – 2013 The Housing Development Agency (HDA) Block A, Riviera Ofﬁce Park, 6 – 10 Riviera Road, Killarney, Johannesburg PO Box 3209, Houghton, South Africa 2041 Tel: +27 11 544 1000 Fax: +27 11 544 1006/7

Acknowledgements The Centre for Affordable Housing Finance (CAHF) in Africa, www.housingﬁnanceafrica.org Coordinated by Karishma Busgeeth & Johan Minnie for the HDA

Disclaimer Reasonable care has been taken in the preparation of this report. The information contained herein has been derived from sources believed to be accurate and reliable. The Housing Development Agency does not assume responsibility for any error, omission or opinion contained herein, including but not limited to any decisions made based on the content of this report.

1. Frequently Used Acronyms 1

2. Introduction 2

3. Context 5

4. Context: Mining Sector Overview 6

5. Context: Housing 7

6. Context: Market Reports 8

7. Key Findings: Housing Market Overview 9

8. Housing Performance Proﬁle 10

9. Market Size 16

10. Market Activity 21

11. Lending Activity 29

12. Leverage 33

13. Affordability Proﬁle 36

14. Rental Index 40

15. Key Concepts 42

16. Source List 45

1. Frequently Used Acronyms CAHF – Centre for Affordable Housing Finance in Africa GDP – Gross Domestic Product GVA – Gross Value Added HDA – Housing Development Agency HPI – Housing Performance Index IDP – Integrated Development Plan NU – Non Urban, a Stats SA subplace designation RDP – Reconstruction and Development Programme SDF – Spatial Development Framework SP – Subplace StatsSA – Statistics South Africa

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 2. Introduction

The Housing Development Agency (HDA) is a national public development agency that promotes sustainable communities by making well-located land and buildings available for the development of human settlements. As its primary activity, the HDA assembles and releases state, private and communal land and buildings for development. In addition, the HDA provides project delivery support services to organs of state at local, provincial and national levels.

In setting the agenda and asserting its role in the housing continuum, the HDA realised that there is a gap in the provision of accurate and easy-to-understand information regarding the property market, particularly in previously overlooked areas, including the mining towns.

The development of this report is a result of this gap. It aims to explore and present an overview of the formal housing markets in Matjhabeng, Moqhaka, Merafong, Randfontein, Westonaria, Thabazimbi, Greater Tubatse, Elias Motsoaledi, Lephalale, Fetakgomo, eMalahleni, City of Matlosana, Mogale City, Ephraim Mogale, Steve Tshwete, Thaba Chweu, Tsantsabane, Ga-Sekgonyana, Gamagara, Kgetlengrivier, Madibeng, Moses Kotane and Rustenburg so as to change perceptions of affordable markets, and as such, expand and deliver affordable housing options within South Africa’s municipalities.

The study was undertaken over a three-month period, relying mainly on the high level indicators developed by the Centre for Affordable Housing Finance in Africa. These indicators consider the market conditions, existing market size and activity, average prices and values, market growth and lending activity in the area to support a better understanding of the opportunity and the impact of various housing policy interventions. The indicators also highlight the range of opportunities across areas to stimulate the affordable housing market in South African municipalities.

The methodology also included site visits to eMalahleni, Randfontein, Westonaria, and Rustenburg so as to conﬁrm ﬁndings and to gain more insights about the current housing circumstances.

The report is intended for use by all stakeholders involved in planning, including professionals in municipalities, Government ofﬁcials, private sector, investors, developers and urban planners, for the mission of enticing a range of development options. The report does not address housing supply for the lowest income levels, but rather seeks to make the case for expanding the gap market in order to entice private sector engagement more effectively.

2.1 Report Contents

The report covers the following aspects of housing markets through maps, charts and graphs to highlight understanding across the municipality and at the neighbourhood level, where housing markets function.

1. Housing Performance Proﬁle – the pace of growth by suburb, on maps and in charts, as measured by the Housing Performance Index 2. Market Size – total number and distribution of residential properties, households, values and sales prices, key demographic indicators 3. Market Activity – properties, sales and new properties and resales over time 4. Lending Activity – sales and loans by lender 5. Affordability Proﬁle – affordability based on local incomes, compared to sales price, housing gaps and affordability ratios 6. Leverage – the value of equity available for purchasing new homes 7. Rental Index – those areas most prime for quality, dense professionally managed rental housing

2.2 Deﬁnitions and Methodology

For housing supply, title and deeds records were merged at the suburb level, mapped and ranked through the Citymark dashboard. Priority has been placed on actual transaction datasets from familiar sources that can be geocoded to the subplace level, trended over time and updated regularly. For housing demand, StatsSA data was applied as the most consistently collected, widely understood and most common source of demographic data in the country.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 2.3 Benchmarks

Benchmarks are indicators used to compare performance across areas and are valuable for understanding meaning. Each indicator was created at the local, municipal and national levels in order to measure performance within and across markets. These benchmarks also highlight areas or trends which are outperforming the overall market in certain ways and might be most receptive to a variety of new housing development options.

2.4 Site Visits

As mentioned, the team conducted four site visits to eMalahleni, Randfontein, Westonaria, and Rustenburg. These visits provided the chance to conﬁrm ﬁndings from the data and chat informally with residents about their current housing circumstances: where they had moved from; where they were currently living and how affordable it was; and where they were headed, including their ambitions and concerns. This helps to provide a sense of the housing continuum in the town – what choices residents feel empowered by, and what constraints keep them from realising their dreams and aspirations. Residents who were engaged came from informal settlements, brand new RDP homes, and a stalled RDP project, which had recently been reactivated by the city.

Some of the key insights from these site visits were:

•฀ Residents may not know exactly what their home might be worth, but they are very aware that their home has a value, which includes stability and security for themselves and a better future for their families •฀ Many residents use their homes to supplement their own income, including renting shacks and rooms and operating home-based businesses •฀ There might be a relationship between how the houses are handed over and the sense of ownership (as evidenced by improvements to the homes) •฀ Everyone we spoke to understood the importance of a title deed, that the title deed proved (secured) ownership, even if, in a few cases, they were not sure of its status or how to get one •฀ Most people mentioned a better future for their children as an integral part of the importance of homeownership •฀ Residents were aware that there is an acute shortage of housing opportunities and that despite having their homes, they were surrounded by others without adequate housing

Many people understood housing markets around them intuitively — where the better houses were closer to jobs and transportation and what the barriers were — the price, the inconvenience and the cash required to access the houses.

2.5 Using this Report

This report is intended to provide a high-level view of the mining town housing markets overall and by neighbourhood, within areas of particular interest, by measuring and comparing housing market performance amongst each other and with the municipality. This report highlights connections and implications from the ﬁndings that are of signiﬁcant interest to the HDA. The report does not seek to understand why things are, but offers general ideas based on experience with housing markets and new learning about mining town housing markets from these reports.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report The report ﬁndings emphasise opportunity as opposed to risk or failure. Opportunities are deﬁned as conditions or indicators within areas, which can show:

•฀ The ways in which areas or markets are behaving positively (such as growing more quickly), or showing strength (such as stability and consistency) •฀ The ways in which areas can be connected to common strategies that promote growth, investment or sustainability (such as proximity to transit or density) •฀ A more accurate picture of the real value of areas in ways that can leverage economic investment (such as equity, lending levels and new registrations) •฀ Better ways in which risk can be measured and accounted for (such as timing, scale, or location risk) •฀ A more comprehensive scope or scale of markets, to better estimate and project market intervention (such as property or population size, absorption rates, or patterns of behaviour) •฀ Ways to challenge and overcome those perceptions or assumptions that might stymie investment, or slow growth

This report is not intended to provide a complete final picture of market conditions or demographic circumstances. It does not reflect conditions in the informal market, nor general attitudes. It is not intended to be the last word on market potential, but is rather the first: how can current conditions present opportunities for better housing options, and improved market performance? Where are places that might be performing better in some ways, which might provide areas of opportunity, and how? The highest and best use of this report is to suggest new ways to support the growth of affordable housing in South African mining towns, by exploring and reconsidering areas for new investment, expanding existing investment, and promoting policies and programmes which can support and entice that development. It can also imply the impact of ongoing investment and programmes activities.

2.6 About Formal Housing Markets

This report relies on the South African deeds registry as the basis for analysing local housing markets. Thus, the report only measures the formal housing market, which can be deﬁned as those residential properties which have been formally titled to a speciﬁc owner or group of owners. While this excludes a large part of the human housing condition in these towns, the advantage of focusing on the formal housing market is that it offers a better understanding of that part of the residential property market, which is most opportune for leverage and investment interventions in ways previously not understood.

Taking into consideration the housing backlog from StatsSA, informal settlements and human mobility, housing markets are quite ﬂuid and difﬁcult to measure. Understanding housing markets more completely is one advantage of the titling initiatives recommended by many housing policy and planning advocates across the country.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 3. Context 3.1 Municipal and Regional Context

Key aspects of the city are shown from here for contextual purposes which have been published on the city’s website. These aspects are summarised from its 2014 IDP, to give important insights to the market overall: •฀ “The Steve Tshwete is in close proximity to the Maputo Development Corridor, the Middelburg/Steelpoort mining resource link as well as the Middelburg/ Bethal/ Ermelo/ Richards Bay Corridor” •฀ “A number of national and provincial roads surround the area to allow for ease of accessibility; the most prominent of these are the N4 National route crossing the area from east to west and the N11” •฀ “The Municipality comprises of two primary nodal points, i.e. Middelburg/Mhluzi which is the main commercial and administrative centre and the much smaller Hendrina/Kwazamokuhle near the south/east boundary” •฀ “The remainder of settlements is arranged in three settlement categories, for planning purposes, which are agricultural, tourist and mining settlements” •฀ “The following towns have been developed by Eskom and are associated with mines and power stations: Rietkuil, Pullenshope and Komati. Mining villages, namely Blinkpan/ Koornfontein, Naledi and Lesedi, were developed to accommodate mine employees. Kanhym, a farming company, developed Thokoza and Eikeboom villages” •฀ “Social services and amenities are usually better developed in the abovementioned settlements” •฀ “In Steve Tswete, mining is the dominant economic sector, it contributes more than 25% to the GVA and 15% to the labour market”

3.2 Socio-Economic Proﬁle:

The municipality’s current demographic information is drawn from the HDA Municipal Proﬁles and from the 2001 – 2011 Census Data: •฀ “Steve Tshwete has a population of 229 831” •฀ “There was a 4.76% population growth between 2001 – 2011” •฀ “In 2011, over 19.7% of the population was unemployed and the dependency ratio was 41.5%” •฀ “There are 64 971 households in Steve Tshwete, with an average household size of 3.3 people” •฀ “72% live in formal dwellings” •฀ “An average of 79.9% of households has ﬂush toilets connected to a sewerage system, piped water inside the dwelling, weekly refuse removal and electricity for lighting” •฀ “44.5% of the residential properties are owned and paid off”

5 The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report

4. Context: Mining Sector Overview

The Steve Tshwete coalﬁeld is situated in the Northern Karoo Basin, stretching from Springs in the west to Belfast in the east and from Middelburg in the north to Rietspruit in the south. 4.1 Mining Industry Proﬁle

•฀ “According to Business – Middelburg’s Business Guide: 2007/08, the strongest economic sector is manufacturing. Columbus Stainless is the world’s ﬁfth largest stainless steel producer that anchors the stainless steel cluster. The Mpumalanga Stainless Steel Incubator was created for the beneﬁciation of local raw materials and to develop entrepreneurs“ •฀ “There are strong coal, copper and platinum (Sheba’s Ridge) mining activities in the area supported by the large mining concerns as well as independent operators, some of the local mines (in alphabetical order): Anglo Coal; Anker Coal; Arnot Colliery; Bank Colliery; BHPbilliton; Black Wattle Colliery; Douglas Colliery; Elcoal Colliery; Euro Coal; Goedehoop Colliery; Graspan Colliery; Ilanga Colliery; Isiswe Mine; Kilbarchan Colliery; Koornfontein Mines; Middelburg Mine; New Clydesdale Colliery; Optimum Colliery; Polmaise Colliery; Shanduka Coal; Sumo Colliery; Woestalleen Colliery and Xstrata Mine“ •฀ “Three of Eskom’s power-generating plants are within the municipal boundaries: Arnot Power Station; Hendrina Power Stations and Komati Power Station which is being recommissioned”

4.2 Housing in the Mining Sector

The remote locations of many mining operations means that mining companies have long histories of providing housing solutions for their employees, from executive management to miners. Each industry has different business models based on the supply and demand of the raw material (coal, gold, platinum and diamonds) and different approaches to housing policies means that the housing solutions vary and are not discussed in speciﬁc terms. The knowledge of the general mine housing policies assists one in understanding the effects on the housing markets in the towns. Unlike large metropolitan areas where housing markets grew more organically, (with some historical master planning involved), these towns were largely designed intentionally to serve the interests of the mining franchises above them. Understanding the housing options offered by the mining companies is an important factor in understanding local housing markets. The following is only indicative of each company’s general approach; the housing models in each town are approached differently and more speciﬁc to their context.

Steve Tshwete’s primary extractive is coal. Over 80% of South Africa’s saleable coal is produced by ﬁve prominent coal mining companies in Steve Tshwete and its surrounds, namely: BHP Billiton’s Energy Coal South Africa (BECSA); Anglo American Thermal Coal; Xstrata Coal; Exxaro Resources; and Sasol Mining. Their mine housing policies outline the following:

•฀ “Anglo American committed more than R2 billion to facilitate home ownership and achieve the Mining Charter target of ‘one person per room’ through 2014” •฀ “Anglo American currently offers a number of different housing options, ranging from housing allowances to houses built for employees” •฀ “Xstrata has eliminated hostels and unsustainable “mine villages” •฀ “XCSA pays industry leading “living out allowances” (about R2000 per month) which are intended to offer employees with flexible housing options throughout the area” •฀ “XCSA educate and train all employees during annual induction training on how to access, and the merits of living in, formal housing as opposed to informal housing” •฀ “Exxaro has introduced a five-year mortgage repayment subsidy for first-time homebuyers who are permanent employees” •฀ “Exxaro has approved a housing capital assistance scheme that was piloted at Arnot, in close proximity to Steve Tshwete. This will assist first-time homeowners on specific salary grades with a capital amount of R75 000 after tax” •฀ “While Exxaro’s housing policy focuses on home ownership, employees receive a housing or living-out allowance to assist them in obtaining accommodation. The total value of these allowances in 2010 was over R137 million” •฀ “Exxaro facilitated employee ownership of 10,510 homes in 2010”

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 5. Context: Housing

The municipality has identiﬁed the following challenges and opportunities from its 2014/2015 IDP:

5.1 Housing Challenges:

•฀ “According to Stats SA, as quoted in the HDA Municipal Proﬁles, Steve Tshwete’s housing backlog was 9,521 in 2011“ •฀ “10.9% of the households in Steve Tshwete live in informal settlements” •฀ “As of September 2011, 27,500 people were in need of housing assistance and were registered on the municipal data base” •฀ “The majority of the people on the database have a monthly household income of less than R3 500pm, the municipality also has a separate list of people in the gap market, earning R3 501 – R 7 500pm – this list has approximately 600 people” •฀ “The annual delivery for low cost housing is approximately 700 units; this constitutes 30% of the required delivery rate” •฀ “At the current rate it will take 22 years to meet the current housing backlog”

5.2 Housing Strategies: •฀ “To address the current housing demand, the municipality needs to deliver 3,142 housing units per year” •฀ “The municipality has adopted the management and control of informal settlements by-laws, in order to prevent the mushrooming of informal settlements. The Squatter Control Unit was established to effect the implementation of the by-laws” •฀ “Steve Tshwete municipality has identiﬁed parcels of public and private owned land for acquisition” •฀ “The municipality has also identiﬁed serviced parcels of land for development of housing for the gap market”

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 6. Context: Market Reports

HDA Mining Town reports market coverage 6.1 Report Coverage Steve Tshwete, Data by suburb of census and formal deeds registry data, 2013 It is important to keep in mind that these reports only cover the formal Kranspoort dorp Loskopdam Nature Reserve housing market, as captured by the Deeds Registry. Thus, there are four layers of information in the report:

1. Total StatsSA suburbs

Piet Tlou SP 2. Suburbs with residential properties 3. Suburbs with residential properties sold

Dennesig Chromville 4. Suburbs with residential properties

Hlalamnandi sold with a bond. Tokologo

Middelburg SP2 This map shows all the census suburbs Steve Tshwete NU in the town (pink) to all the suburbs Copper Mine with residential properties with bonded sales (dark red). The chart shows what Klipbank Mine Rietkuil SP Woestaleen Mine percentage of the town has a formal Banks Collieries Rietkuil Mine residential housing market. This may Optimum Colliery Opencast Mine help explain some of the maps and Pullens Hope SP why some suburbs are included and

Blinkpan SP some may be omitted. For example,

Komati SP information on bonded sales will only Mafred Hope SP reference suburbs in which bonded sales took place. Hendrina SP

Source: Stats SA Census, 2011, South African Deeds Registry via Lightstone (Pty) Ltd, 2015.

Data coverage 1 4

Market Area By The Numbers Suburbs 55 Suburbs with residential properties 40 Households 64 976 Residential properties 36 198 Housing backlog 9 521 Backlog as percent of all properties 15% Households to properties ratio 1.80 Total residential value R1.8 Billion Steve Tshwete Housing Report Coverage Average monthly income R12 500 Total Census Subplaces (SPs) 55 Average property value R520 400 Total SPs with registered 40 73% Average sales price R637 000 residential properties Total SPs with sales 37 67% Source: Centre for Affordable Housing Finance in Africa, Lightstone, StatsSA Total SPs with bonded sales 38 69%

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 7. Key Findings: Housing Market Overview

The Steve Tshwete housing market has experienced stable growth, when compared to other mining towns. This is likely due to possible stability in the mining sector and urbanisation of previously undeveloped or rural areas within the municipality. Overall, it has experienced decline after two years of steady growth; this may be due to impact of low sale prices throughout the municipality. However, this does create an opportunity for markets to be carefully assessed in order to best position the next wave of growth.

At 1.93, Steve Tshwete’s affordability ratio is below both the national average and the mining town average. Despite an above-average monthly income, there remain large disparities among incomes and affordable housing access within the municipality. This may prioritise housing strategies and solutions which propose creative ﬁnancing tools and techniques to reduce ﬁnancial barriers (such as down-payments, interest rates and principal requirements) as well as unlocking equity, rather than simply trying to push costs down.

The presence of 31% of Government-sponsored units and the high percentage of equity for these properties, highlights an important opportunity to leverage that investment in affordable housing in the years ahead, as owners seek to sell and move up the housing continuum if opportunities are positioned properly. Average equity in these areas double purchasing power, putting moderately priced housing within reach of lower income families. This situation can be used to drive developers to build more gap housing and ﬁnanciers to ﬁnance low-priced acquisition loans.

The area has a considerable diversity and integration of housing values. Property types are predominantly freehold; there is notable activity throughout the municipality but almost all properties are transacted below their Formal mixed-income housing development provides adequate returns for developers while providing lower income homes, and creates a market less reliant on Government and mining intervention.

Steve Tshwete has experienced incremental and consistent lending from non-traditional lenders; the lending portfolio for non-traditional lenders has doubled from 2008 – 2013. Lending by these lenders is most evident closer to the mines. The presence of 31% RDP units means it will be an important strategy to encourage traditional and new lenders to develop creative loan programs targeting those homeowners in order to make it easier for them to sell their homes, unlock the value of those homes and allow owners to move up the housing continuum.

The opportunity for rental housing development within Steve Tshwete is strong within speciﬁc areas, such as Mhluzi SP. Data indicates that 42% of households are renting. Those areas with greater density, modest incomes and affordability challenges are more likely to support quality, professionally managed affordable rental housing. Rental housing also provides ﬂexibility to employers and workers as mining markets expand and contract from time to time.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 8. Housing Performance Proﬁle

8.1 Key Findings: Housing Performance Index

The Steve Tshwete housing market has declined after experiencing steady growth for two years; this may be strongly affected by the number of declining subplaces and the decreasing urbanisation of previously undeveloped or rural areas within the municipality. Mining activity, which is not included in this report, may be a factor as well.

Recent growth has surged a bit, creating an opportunity for markets to be carefully assessed in order to best position the next wave of growth. Housing options are not currently diversely distributed across the municipality.

8.2 Policy Implications

With a market growing as declining like Steve Tshwete, meeting housing demand will be a crucial factor in stabilising the town through this period of growth. In slow growth neighbourhoods, where most of the lower-priced housing currently exists, housing will need to be built more affordably but will need to be situated well to better integrate housing markets. Site development initiatives should include rental housing to meet the increased demand.

8.3 Quick Deﬁnitions:

Housing Performance Index (HPI): provides an understanding of local housing market performance by tracking six key indicators which most effectively convey fundamental components of real estate markets and then comparing them to the results for the entire municipal property market to determine areas of growth or strength relative to the entire metro.

Housing Performance Proﬁle: this describes housing market performance of local areas as growing (those areas where the index is 6.5 or higher), stable (the index is 4 or higher) or slow (the index is less than 4) compared to the metro in which it is located.

Formal Housing Market: residential properties that are registered on the South African deeds registry. This does not include informal settlements or other houses otherwise not on the deeds registry.

Indicators: suburb-level measures used to convey a more complete understanding of housing markets, sometimes a point of data (such as number of properties), or a calculated factor (such as the housing index or the affordability ratio).

Housing Continuum: a range of housing options which are available to a wide range of income levels, budgets, housing types and ownership opportunities.

Bonded Sales: the total residential properties that were transacted with a bond collateralised or secured by that property.

New Registrations: residential properties that have never appeared on the deeds registry before. This is an important indicator of the growth of a market, whether the property has just been built or was built previously and never registered.

Churn: an indicator of the sales activity within an area similar to turnover, it is the number of residential sales transactions divided by the total number of properties.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 8.4 The Housing Performance Index Housing Performance Index Steve Tshwete, 2013 Market growth of six key housing market indicators, compared to the metro This map identiﬁes the Housing Performance Proﬁle Kranspoort dorp by suburb (top) and total residential properties (bottom), to provide a sense of how local property markets are performing compared to the metro as a whole. The Housing Performance Index (HPI) provides

Kranspoort dorp a glimpse of the formal housing market only, and

Steve Tshwete NU does not include any demographic information. The Middelburg SP1 weights were determined by how well the indicator Dennesig Kanonkop Tokologo Eastdene reﬂects activity, increased investment and demand

Middelburg Mine Middelburg Industrial (and how reliably the indicator can be measured). Middelburg Ext. 24 Middelburg SP2

Steve Tshwete NU Middelburg SP1 This information is useful in understanding how Dennesig Kanonkop the formal market is behaving (which is inﬂuenced Tokologo Eastdene Rietkuil SP by the presence of mines, informal settlements and Middelburg Mine Middelburg Industrial Middelburg Ext. 24 Middelburg SP2 Pullens Hope SP the people who move in and around the towns). Koornfontein Mine This picture is intended to help understand how key Komati SP Mafred housing sector partners (developers, investors) seek

Rietkuil SP Hendrina SP and measure opportunity, in order to better inform and coordinate Government planning processes and Pullens Hope SP Koornfontein Mine private sector motivation.

Komati SP Mafred Source: Centre for Affordable Housing Finance in Africa, 2015. All indicators reflect formal market data as reflected on the deeds registry. “Growing” suburbs are areas which exceed the Hendrina SP Housing Performance Profile Growing metro’s rate of change in any four of six key market Stable Slow indicators. “Stable” areas meet or beat the metro Null in at least three indicators and “Slow” areas are growing at rates less than the metro in two (or fewer) Housing Performance Index of the six indicators. While an index provides quick Steve Tshwete, 2013 Market growth profile by suburb, with property volume understanding, it is important to look more closely at the indicators themselves to understand more clearly

Kranspoort dorp the underlying factors affecting market growth and stability.

CAHF Housing Performance Index Indicator Measured Implies Weight Price Average Appreciation 25% Middelburg SP1 Dennesig Mhluzi Ext. 2 sales price Kanonkop

Eastdene Hlalamnandi Value Average Appreciation 25% Tokologo

Mineralia Nazareth Aerorand property

Steve Tshwete NU Middelburg Ext. 24 value Transac- Number of Demand 15% tions sales Percent Bonds per Investment 15% Rietkuil SP bonded sales Churn Repeat sales Activity 10% Pullens Hope SP as a percent of total Koornfontein Mine Blinkpan SP

Komati SP properties Mafred Emaskopasini Mapehla New New Growth 10% Kwazamokuhle SP Hendrina SP properties properties

Source: Centre for Affordable Housing Finance in Africa, 2015. All indicators reflect formal market data as reflected on the deeds registry. added to the

Total Residential properties Housing Performance Profile 0 Growing registry 1 000 Stable 2 000 Slow ≥ 3 000 Null 11

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Housing Performance Index Trends 6,5 5,0 Steve Tshwete, performance over time relative to the metro, 2007 -2013 Mhluzi Ext. 5 & 6 4,0 2,5 7,5 2,5 3,0 4,0 Aerorand 2,0 4,5 6,5 5,0 4,0 1,0 3,5 Mhluzi Ext. 7 5,0 5,5 2,5 0,0 5,0 4,0 Blinkpan SP 2,5 4,0 0,0 0,0 Mhluzi Ext. 8 5,0 2,5 4,0 6,5 2,5 0,0 6,5 5,0 Chromville 5,5 5,0 3,0 5,0 2,5 Mhluzi SP 2,5 4,0 2,5 0,0 6,0 5,0 Clubville 3,5 Middelburg 4,5 5,0 1,0 3,5 2,5 2,5 Central 1,0 3,5 6,5 1,0 4,0 Dennesig 2,5 1,0 3,5 Middelburg Ext. 4,0 5,0 1,0 24 2,5 2,5 7,5 2,5 2,5 5,0 Eastdene 5,0 Middelburg 4,5 2,5 1,0 2,5 Industrial 2,0 1,0 2,0 0,0 0,0 6,5 6,5 Emaskopasini 2,5 2,5 2,5 2,5 Middelburg Mine 6,5 Golfsig 5,0 2,5 1,0 3,5 1,0 Middelburg SP1 6,5 6,5 Hendrina SP 7,5 1,0 1,0 4,5 3,5 1,0 Middelburg SP2 4,5 2,5 7,5 7,5 2,5 2,5 6,5 Hlalamnandi 6,0 5,0 5,0 5,0 5,0 3,5 Midlands Estate 4,5 2,0 2,0 5,0 4,0 Kanonkop 2,0 1,0 3,5 4,5 5,0 1,0 Mineralia 1,0 1,0 2,5 1,0 5,0 8,0 Komati SP 2,5 4,0 5,5 1,0 3,0 4,0 Mountain View 5,0 5,0 0,0 0,0 Koornfontein 6,5 Mine 0,0 0,0 0,0 0,0 5,5 8,0 0,0 0,0 Nazareth 2,5 2,5 0,0 Kranspoort dorp 3,5 3,5 5,0 6,5 1,0 1,0 1,0 Pullens Hope SP 2,5 3,0 2,5 8,0 6,5 0,0 0,0 Kwazamokuhle 5,0 6,5 SP 5,5 3,5 2,5 Rietkuil SP 2,5 2,5 0,0 0,0 2,5 8,0 5,0 Mafred 5,0 Steve Tshwete 4,0 6,5 2,5 2,5 2,5 NU 3,5 1,0 1,5 5,0

Mapehla 5,0 4,0 2,5 Tokologo 2,5 2,5 2,5 2,5 1,5 0,0 0,0 0,0 0,0 5,0 Mathaylini 5,5 6,5 8,0 5,0 4,0 0,0 2,5 1,5 Tycoon 4,0 2,5 2,5 5,0 4,0 Mhluzi Ext. 2 5,0 2008 2009 2010 2011 2012 2013 Source: Centre for Affordable Housing Finance in Africa, 2015. All indicators reflect formal market data as reflected on the deeds reg- 2,5 2,5 0,0 istry. 7,0 Growth Profile 9,0 9,0 Growing Mhluzi Ext. 3 5,0 6,0 Stable 2,5 Slow Null 6,5 6,5

Mhluzi Ext. 4 4,0 2,5 2,5 0,0

5,0

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Housing Performance Index Trend Steve Tshwete, 2008 - 2013.

Steve Tshwete 6,0

2,5 2008 2009 2010 2011 2012 2013 Year Source: South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds reg-

8.5 Performance Over Time

These charts provide the housing performance index by suburb over time using the six key indicators (price and value appreciation, sales and bonded sales, churn and new properties). Growth is relative to the municipality (and change from the preceding year), so it is important to compare these lines to the area’s overall performance and the direction in which the trends are headed. The city’s growth overall (below) is in the top 6 growth markets for mining towns and appears to be on a stable upward trend, as compared to the province.

Steve Tshwete appears to be have an almost equal distribution of subplaces which are growing and declining, with the greatest declines taking place in 2010 and 2013. In considering development investment over the long term, stability of growth is often a more important consideration when projecting future performance, than high growth. Building housing opportunities between areas of high and low growth can better integrate housing markets overall. This information can help inform one how to create a more cohesive and stable housing continuum, with fewer spikes and drops and where to begin.

Areas with no data have no residential properties or sales transactions, such as farms or open space, mines or industrial uses like power generation.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Key Performance Indicators 8.6 Housing Performance Steve Tshwete, 2008 - 2013 Change over time of the six key indicators within the Housing Performance Index Indicators R 637K R 600K R 600K Six indicators – price and value R 497K R 520K appreciation (top orange and blue lines), R 400K R 400K R 397K total sales and bonded sales (middle green bars and brown line), change in R 200K R 200K

Avg SaleAvg Price (orange) new properties and churn (bottom red Avg Property Value (blue) Property Avg and blue lines) – are the most telling R 0K R 0K 2 000 1,873 2 000 of growing, active housing property 1,669 markets. The relationship between 1,494 1,503 1 500 1 500 1,311 indicators provides clues as to what 70% 1,155 may be driving performance, what that 1 000 1 000 61% (brown) 53% 57% might mean for future development Steve Tshwete Steve 60% 59% 500 500 potential and how it might affect or be Total Total Residential Sales (green) Total Total Bonded Residential Sales inﬂuenced by different housing types, 0 0 3,5% 3,3% 3,4% prices or target incomes. 3,2% 3% 2,9% 3% 2,5% These charts compare the performance 2% 2% of three ownership types, namely

Churn Churn (blue) freehold, sectional title and estate 1,3% 1% 1,1% 1% ownership. The housing market in 0,8% 0,7% 0,7% Change inChange New Properties (red) 0,6% Steve Tshwete is dominated by freehold 0% 0% 2008 2009 2010 2011 2012 2013 properties. Overall properties have Source: SA Deeds Registry from Lightstone. All indicators reflect formal market data as reflected on the deeds registry. been selling above their values Key Indicators suggesting active lender and buyer Avg Property Value Avg Sales Price interest in area. This may also be the Total Residential Sales Total Bonded Residential Sales result of lower cost housing bringing Change in New Properties the average value down. Churn

Overall the number of sales (green Key Performance Indicators Steve Tshwete, Freehold properties, 2008 - 2013 bar) have increased steadily since Change over time of the six key indicators within the Housing Performance Index 2009 and bonded sales (brown line) R 600K R 557K R 600K have almost stabilised since 2009.

lue) R 429K R 476K R 400K R 400K

(orange) R 362K Housing markets are very sensitive to ty Value (b ty access to credit, so lending information

ale ale Price R 200K R 200K will be helpful in understanding this

vg vg Proper

Avg S Avg A more closely (see Lending below). R 0K R 0K Churn rates have steadily increased 1 500 1,423 1 500 (blue line), indicating higher turnover 1,208 1,097 1,103 l Sales s s (green) of existing homes over time as well. ete 1 000 926 1 000

853 n)

65% esidentia

(brow ential Sale 62%

Steve Tshw Steve 500 51% 54% 500 59% onded R 56%

otal otal Resid

Total Total B 0 0 3% 3,0% 3% 2,7% 2,6% 2,5% 2,3% 2,1%

rties (red) rties 2% 2%

(blue)

ew Prope

Churn 1% 1,1% 1%

hange hange in N

C 0,5% 0,5% 0% 0,3% 0,1% 0,3% 0% 2008 2009 2010 2011 2012 2013 Source: SA Deeds Registry from Lightstone. All indicators reflect formal market data as reflected on the deeds registry.

Key Indicators Avg Property Value Avg Sales Price Total Residential Sales Total Bonded Residential Sales Change in New Properties Churn 14

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Key Performance Indicators 8.7 Housing Performance Steve Tshwete, Sectional Title properties, 2008 - 2013 Change over time of the six key indicators within the Housing Performance Index Indicators by Property Type R 840K R 800K R 800K R 700K R 807K Different housing markets perform

nge) (blue) R 600K R 663K R 600K in different ways, including freehold (free-standing) homes and sectional R 400K R 400K Price (ora erty Value erty title (subunits within a single property).

R 200K R 200K vg Sale A The area is predominantly freehold (see

Avg PropAvg Market Size below), with several places R 0K R 0K

397 s throughout the municipality having

n) 400 400 343 348 sectional title properties and only a 87% 305 303 300 300 ntial Sale few having estate properties. Overall,

ales ales (gree 226 shwete sectional title sales prices have been 200 66% 64% 200

d Reside

(brown)

idential S 63% 63% parallel to the property values except Steve T Steve 69% 100 100 in 2010, when there was a decline in

tal tal Bonde

Total Total Res To sales prices. Market activity decreased 0 0 signiﬁcantly in 2009 in terms of sales, 11,8% 10,3%

ed) 10% 9,4% 9,5% 10% lending and rates of new properties 8,6% 8,8%

e) added to the registry (red line).

perties (r perties

5,5% 6,4%

5% 5% hurn (blu

C Estate properties have sold at least n New Pro 4,5% 3,3% 3,5% R427 000 below their value. 2,9%

Change i Change Interestingly, when the volume of 0% 0% 2008 2009 2010 2011 2012 2013 estate properties were at their peak, Source: SA Deeds Registry from Lightstone. All indicators reflect formal market data as reflected on the deeds registry. i.e. 2012, sales prices were at the Key Indicators lowest and the percentage of bonded Avg Property Value Avg Sales Price sales were also considerably low. Total Residential Sales Total Bonded Residential Sales Change in New Properties Lending is instrumental in the growth Churn of housing markets and the ability

Key Performance Indicators to access bonds to buy sectional title Steve Tshwete, Estate properties, 2008 - 2013 houses has driven the growth of Change over time of the six key indicators within the Housing Performance Index R 1 500K R 1 500K this housing type. Sectional title is R 1 449K

e) also an important affordable R 1 220K ge) homeownership option. R 1 000K R 963K R 1 000K

alue alue (blu R 793K

ice ice (oran Estate properties are, however, R 500K R 500K

Property V Property g Sale Pr experiencing the greatest drop in

Av Avg market activity and average sales R 0K R 0K prices are trending signiﬁcantly below 118 es property values.

green) 100 94 100

80 ential Sal 76

hwete

tial Sales ( 53 rown) 52 (b

ed ed Resid 50 71% 69% 50 Steve Ts Steve 39%

l Residen 38% 67% 53%

otal otal Bond

Tota

T 0 0 15% 14,7% 15% 12,9% 11,6%

es (red) es 10,8% 10% 10% 10,3%

Properti 6,5%

5,8% urn (blue)

5% 5% Ch

nge nge in New 4,1% 2,9% Cha 2,3% 1,9% 0% 1,2% 0% 2008 2009 2010 2011 2012 2013 Source: SA Deeds Registry from Lightstone. All indicators reflect formal market data as reflected on the deeds registry.

Key Indicators Avg Property Value Avg Sales Price Total Residential Sales Total Bonded Residential Sales Change in New Properties Churn 15

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 9. Market Size

9.1 Market Size: Key Findings Steve Tshwete’s housing market is essentially three markets: Government-sponsored housing built as part of the national housing initiative over the past 20 years, privately traded and ﬁnanced homes and informal settlements. Markets are clustered with lower-priced, actively selling private growing markets near the city centre; and middle income; non-bonded Government-sponsored developments and informal settlements (not on the deeds registry).

The implied demand for housing is high. Demand creates opportunities for new housing supply to be positioned between the existing segregated markets to better integrate the town’s spatial, income and housing markets.

9.2 Policy Implications

Government can use this existing investment to identify areas of future development and entice private sector participation. Existing Government investment in housing can be leveraged to guide new development opportunities, if and when those homes can be sold to new buyers and the proceeds then used to purchase new housing further up the housing continuum. For example, Government might prioritise new development between Government-dominated and private markets for more integration into mixed-income sites and ﬁll spatial gaps within the town.

The encouragement of the expansion of ﬁnancing to lower income families will allow for those homes to be sold and the proceeds then used to support housing development further up the housing continuum.

Rapidly changing housing demand, driven by mining activities, makes a strong case for prioritising quality rental housing. If rental housing is well-situated and convenient to transport and centrally located in dense areas, it can bring social and economic cohesion to housing markets over the longer term.

9.3 Quick Deﬁnitions: Market Size: the total number and distribution of important aspects of areas, including average home prices; home values; and total households in order to inform the potential scale of housing intervention strategies and the impact of proposed development schemes.

Property Value Segment: in order to better understand the performance of housing markets, data has been grouped into four property value bands: properties valued under R250 000; between R250 000 and R500 000; between R500 000 and R1.2 million and over R1.2 million. This helps one to understand the various trends and strengths inherent in each segment and to see how properties are integrating across the housing continuum, especially over time.

Government-sponsored Housing: housing which was created through some Government intervention, from site and infrastructure provision, direct construction or ﬁnance, such as Site & Service, RDP and BNG. While these homes are not recorded as such on the deeds registry, their presence is estimated based on surrounding registrations, timing, prices, and volume of activity.

Freehold / Full Title: a permanent and absolute tenure of land or property by a person or entity (such as a corporation or trust) with freedom to dispose of it at will. Freehold or Full Title describes the assumption of full ownership rights when one owns a property, often including the building and the land it is built on.

Sectional Title: separate ownership of units or sections within a complex or development. These are often comprised of mini subtype houses, semi-detached houses, townhouses, ﬂats or apartments and duet houses. These are governed by the Sectional Titles Act and managed by a body corporate comprised of elected representatives from the sectional title owners in the development.

Absorption: the pace with which homes to be developed might be sold in a speciﬁc market during a given period of time. This can calculated by dividing the total number of available homes coming on line by the estimated number of sales per month, often based on the rate of sales nearby.

Households to Properties Ratio: the total number of households (as reported by the census) divided by the total number of residential properties on the deeds registry. This is a quick, easy relative indicator of household density and formality of a suburb as compared to other areas. 16

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Distribution of Properties and Values by Suburb 9.4 Market Size and Steve Tshwete, 2013 Formal residential properties, informal settlements and mines, by suburb Government Investment in Housing Kranspoort dorp Market size measures the distribution of home prices, households and values in order to inform the potential scale of housing intervention strategies and the

Dennesig impact of proposed developments on Mountain View Chromville Middelburg Central Mhluzi Ext. 5 & 6 Mathaylini the surrounding area. It can also show Mhluzi Ext. 8 Mhluzi Ext. 7 Middelburg SP1 the impact of Government investment Middelburg Mine Nazareth Middelburg Industrial Middelburg Ext. 24 in housing markets. Comparing the distribution of values to the housing performance map, several moderate Rietkuil SP income areas are growing faster than

Pullens Hope SP the Municipality.

Koornfontein Mine Mafred In Steve Tshwete, properties with Kwazamokuhle SP lower values are concentrated in the northwest of town, along and coincide Source: South African deeds registry via Lightstone (Pty), Ltd; Housing Development Agency informal settlements and mines. with Government investment in Number of Residential properties Type Affordability 0 15 000 Informal Settlement Under R250k housing (map two). 5 000 Mines Between R250k - R500k 10 000 Between R500k - R1.2m Over R1.2m It is a very positive fact that so many Government-sponsored housing Number and Percent Government Sponsored Residential Properties units are on the deeds registry. Steve Tshwete, by total residential properties per suburb, 2013 Often, these homes are undervalued, for two reasons. The subsidy value was Kranspoort dorp often noted as the sales price (rather than the cost), or sales prices are driven low because buyers lack access to credit with which to purchase the homes at a more realistic sales price and must pay with the cash they have.

The encouragement of the resale of Government-sponsored housing is an important means of expanding housing options – for the sellers, who Middelburg SP1 Dennesig Mhluzi Ext. 2 Kanonkop can move up the ladder with the equity Eastdene Hlalamnandi from the sale of their property, to the Tokologo

Middelburg Mine ﬁrst time homebuyer purchasing the Mineralia Nazareth Steve Tshwete NU Middelburg SP2 existing home. More activity in these Middelburg Ext. 24 markets will also raise the value of the home, often a family’s most valuable asset.

Rietkuil SP

Pullens Hope SP

Blinkpan SP

Komati SP Mafred Emaskopasini

Kwazamokuhle SP Hendrina SP

Source: South African Deeds Registry via Lightstone (Pty) Ltd. All indicators reflect formal market data as reflected on the deeds registry.

Total Residential properties % Govt Sponsored 0 0% 75% 1 000 2 000 ≥ 3 000 17

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Market Size: Total Properties by Property Value Segment 9.5 Market Size by Value Steve Tshwete, 2013 Sorted by suburb, by property value Segment Aerorand 1 596 1 842 These charts provide the total Middelburg Central 478 1 783 312 properties within each suburb by 1 125 983 Mhluzi SP property value segment: below Mhluzi Ext. 2 555 1 547 R250 000 (which includes most of Mhluzi Ext. 5 & 6 1 987 the Government-sponsored housing); Kwazamokuhle SP 1 812 between R250 000 – R500 000; Tokologo 1 846 between R500 000 and R1.2 million Kanonkop 313 1 415 and over R1.2 million). Steve Tshwete Mineralia 1 397 109 has a mixed range of property values

Mhluzi Ext. 8 1 515 in several suburbs and other suburbs hosting only one range of housing Middelburg Ext. 24 1 231 values. This may help to explain the 180 692 320 Mhluzi Ext. 3 area’s fairly stable market. Mhluzi Ext. 4 185 903 Dennesig 136 795 In small housing markets Government Rietkuil SP 767 102 interventions and programmes must Pullens Hope SP 456 390 be more speciﬁc as their impact on the Eastdene 784 market overall will be greater. Emaskopasini 154 526

Mountain View 272 393 A diverse approach may help to

Golfsig 487 161 expand the diversity and distribution of housing options across town. Nazareth 337 114172 Tycoon 384 220 Mhluzi Ext. 7 586

Hendrina SP 303 238

Hlalamnandi 139 348

Kranspoort dorp 114 427

Komati SP 272 148

Clubville 351 104 Mafred 152 245

Chromville 172 177

Midlands Estate 308

Steve Tshwete NU 271

Mathaylini 161

Blinkpan SP 158

Mapehla

Middelburg Industrial

Koornfontein Mine

Middelburg SP2 5

Middelburg SP1 0

Middelburg Mine 0 400 800 1200 1600 2000 2400 2800 3200 3600 Total Residential Properties Source: SA Deeds data, via Lightstone (pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry. Property Value Segment Under R250k Between R250k - R500k Between R500k - R1.2M Over R1.2M

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 9.6 Market Size by Property Type

Steve Tshwete residential properties are predominantly freehold, with several places throughout the municipality having sectional title properties and only a few having estate properties.

Market Size: Total Properties by Property Type Steve Tshwete, 2013 Freehold, Sectional Title and Estate properties Aerorand 1 011 70 2 383 Middelburg Central 1 342 1 236 Mhluzi SP 2 153

Mhluzi Ext. 2 2 107 Mhluzi Ext. 5 & 6 1 994 Kwazamokuhle SP 1 849 Tokologo 1 848

Kanonkop 208 1 522 Mineralia 148 1 424 Mhluzi Ext. 8 1 520 Middelburg Ext. 24 1 231 Mhluzi Ext. 3 1 192

Mhluzi Ext. 4 1 091 Dennesig 905

Rietkuil SP 869 Pullens Hope SP 847 Eastdene 180 631 Emaskopasini 680 Mountain View 668 Golfsig 519 Nazareth 623 Tycoon 607

Mhluzi Ext. 7 586 Hendrina SP 515 Hlalamnandi 546 Kranspoort dorp 541

Komati SP 433 Clubville 118 337 Mafred 418 Chromville 371 Midlands Estate 315

Steve Tshwete NU 271 Mathaylini 224 Blinkpan SP 154 Mapehla 157 Middelburg Industrial

Koornfontein Mine 14 Middelburg SP2

Middelburg SP1 0 Middelburg Mine 0 0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200 2400 2600 2800 3000 3200 3400 Total Residential Properties Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry. Property Type Description Freehold Estate Sectional Title

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Market Size: Households, Properties and Income 9.7 Market Size by Steve Tshwete, 2013 Total households, renting, total properties, household to property ratio and average monthly income by suburb Households and Income Households Renting (Grey) 0K 2K 4K 6K The understanding of the distribution 23% Steve Tshwete NU 5,088 278 18.3 R 6.6K of households and incomes within 36% Middelburg SP1 4,032 0 R 2.4K Steve Tshwete helps to inform 46% Mhluzi SP 3,841 2,153 1.8 R 8.0K one of scale, development impact 52% Mhluzi Ext. 5 & 6 3,715 1,994 1.9 R 4.6K and programme targets. Census 56% Middelburg Central 3,553 2,599 1.4 R 24.9K data is useful as the only source of 30% Kwazamokuhle SP 3,371 1,849 1.8 R 4.7K demographic information consistently 27% available at the suburb level and Mhluzi Ext. 2 2,755 2,107 1.3 R 6.9K 54% provides interesting insights into local Middelburg Ext. 24 2,723 1,231 2.2 R 5.1K 37% differences. Tokologo 2,575 1,848 1.4 R 5.5K

Mineralia 58% 1,572 1.6 R 26.3K 2,470 Areas with moderate levels of renters Aerorand 31% 3,464 0.7 R 39.1K 2,383 (grey bars) also very often have the 30% Kanonkop 2,249 1,730 1.3 R 32.4K highest household incomes (such as 33% Mhluzi Ext. 8 2,232 1,520 1.5 R 5.6K Mineralla and Clubville). We suggest 47% Mhluzi Ext. 4 1,873 1,091 1.7 R 4.9K these high levels of renters might be 26% Mhluzi Ext. 3 1,302 1,192 1.1 R 12.5K the combination of mining executives 44% Eastdene 1,184 823 1.4 R 16.0K who rent (instead of own) their homes 25% Dennesig 1,177 931 1.3 R 33.2K and support staff who rent nearby 64% Pullens Hope SP 1,119 847 1.3 R 14.1K in backyard accommodation. While 57% Clubville 932 455 2.0 R 31.3K this generates important income to 32% Tycoon 930 607 1.5 R 7.2K the owners, the creation of quality, 59% affordable rental housing in those Rietkuil SP 926 880 1.1 R 14.1K 28% areas can help to address some of the Golfsig 880 654 1.3 R 40.5K 48% housing backlog more quickly. Mountain View 867 668 1.3 R 6.3K

Mhluzi Ext. 7 40% 586 1.5 R 7.7K 851 Areas with above-average renters and Nazareth 25% 623 1.4 R 10.9K 842 moderate incomes (green bar) (such 32% Emaskopasini 748 680 1.1 R 7.0K as Mhluzi Ext 5 & 6, Mountain View) 51% Hlalamnandi 747 546 1.4 R 13.0K might display families ready for more 54% Hendrina SP 683 568 1.2 R 15.6K formal rental options. 68% Komati SP 640 460 1.4 R 14.7K 40% Chromville 610 371 1.6 R 17.2K Ratios of households (from 45% Mafred 544 418 1.3 R 8.4K StatsSA) to properties (from the 42% Mathaylini 460 224 2.1 R 11.1K deeds registry) – the red bar – can 54% Blinkpan SP 445 159 2.8 R 9.6K show degrees of limited supply or 29% Midlands Estate 313 336 0.9 R 29.9K informality. The informal settlements 34% Mapehla 282 157 1.8 R 15.0K have high populations, low formal 28% properties, few registered properties Kranspoort dorp 202 541 0.4 R 12.9K 51% and low incomes. Middelburg Mine 45 0 R 8.1K 0% Middelburg Industrial 32 17 1.9 R 2.9K 44% Koornfontein Mine 18 14 1.3 R 12.2K

Middelburg SP2 0% 5 0.6 R 20.2K 3 Avg =905 Avg= R 14.2K 0K 2K 4K 6K 0K 1K 2K 3K 4K 0 5 10 15 20 R 20.0K R 40.0K

Total Households Total Residential Properties HHs to Properties Ratio Avg monthly HH income

Source: Stats SA Census 2011 (with CPI increase); South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 10. Market Activity

10.1 Key Findings

Sales activity is evident in several subplaces throughout the municipality, however the properties that are being transacted are selling considerably below their values. Sales dropped across the country after 2008 and in Steve Tshwete they have steadily increased until sales experienced a decline in 2013. Bonded sales in lower markets are an extremely small portion of the bonded market.

Sales continue to be dominated by repeat sales, with very few new housing sales. Property value (the home’s worth) and sales prices are closely related in active markets. In less active markets, sales prices are less than their suggested value.

10.2 Policy Implications

Focus on increasing access to lending, determining what barriers exist to make credit more accessible – either through lower cost products, more ﬂexible terms, and/or inclusion of existing debt into a mortgage loan product. These products should be tailored to meet the needs of the lower income markets.

Create ﬁnancing products that can bring down the cost of quality rental housing as an affordable alternative to homeownership for lower income families.

10.3 Quick Deﬁnitions:

Market Activity: performance of key housing property market indicators over time, such as sales, bonds, registrations and churn.

Market Share: the proportionate share of the market according to certain indicators, such as loans, types of properties, or property values.

Property Value Segment: in order to better understand the performance of housing markets, data has been aggregated into four property value bands: properties valued under R250 000; between R250 000 and R500 000; between R500 000 and R1.2 million and over R1.2 million. This helps one to understand the various trends and strengths within each segment, and to see how properties are integrating across the housing continuum, especially over time.

Bonded Sale: a transfer of deed on the deeds registry with an associated bond from a lender, including the property as collateral for the bond.

New Sale / New Registration: the appearance of a residential property on the deeds registry for the ﬁrst time. It might include new construction or previously existing units being recorded for the ﬁrst time (such as previously built RDP homes).

Resale / Repeat Sales: the sale or transaction of a property which has existed on the deeds registry before (as opposed to a new sale or new registration).

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 10.4 Sales and Bonded Sales by Property Value Segments

About 79% of all residential sales and 87% of bonded sales in Steve Tshwete were over R500 000 (the red and orange sections). Market share (the portion of the total) by property value segment has steadily increased since 2009, suggesting a stable housing market. The decline in sales and bonded sales in 2013 is also reﬂected in the decline in the housing performance. The relationship between sales and bonds shows the importance of access to credit to growing housing markets, in particular the lower valued segments. The share of bonded sales under R500 000 has ﬂuctuated over time, but still takes up the lowest share of the lending market. This might be due to credit indebtedness which disproportionately impacts lower income borrowers, or lack of access to affordable homes to buy. Policies that help expand access to credit and provide more housing opportunities under R500 000 in the lower bands, can expand sales within that band. Rental housing might also be a more suitable option.

Total Sales by Property Value Segment Total Bonded Sales by Property Value Segment Steve Tshwete, 2008 - 2013 Steve Tshwete, 2008 - 2013 All residential sales All residential sales 2000 2000

1800 9% 1800

6% 1600 12% 1600 8% 8% 9% 1400 1400

10% ales 11% 11% 7% ales 1200 1200

ntialS 12% 10% 14%

ntial S ntial 1000 10% 1000 62% 61% Reside 4% Reside 3% 800 8% 7% 3% 61% onded 800 58% 7% 11%

Total 11% 53% 63% 6%

600 57% B Total 600 10% 56% 63% 58% 400 55% 400 59%

200 25% 17% 22% 21% 200 23% 23% 34% 19% 25% 29% 26% 27% 0 0 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013 Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry. reflect formal market data as reflected on the deeds registry. Property Value Segment Property Value Segment Under R250k Under R250k Between R250k - R500k Between R250k - R500k Between R500k - R1.2M Between R500k - R1.2M Over R1.2M Over R1.2M

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Percent of Sales Bonded by Value Segment 10.5 Lending per Property Value Steve Tshwete, All residential sales, 2008 - 2013 Segments 80% 76% 77% This chart shows (by contrast to the previous 71% charts) the percent of bonded sales within the 70% 70% various property value segments. The relatively few formal bonded sales in the town make the trend lines more dramatic. 60% 56%

54% Overall, the total sales receiving bonds in

d 49% 50% Steve Tshwete went down signiﬁcantly in the past six years and appear to be Bonde recovering from the decline, however this 40% has not been evenly distributed across all

Sales property values. The lowest property values

ent of ent (the green line) experienced the greatest decrease

Perc 30% since 2008, from 49% to 17%, perhaps due to decreased supply of housing that falls within this segment or no access to credit. 20%

17% Mid-range and upper tiered properties sales experienced relatively ﬂuctuating activity 10% since 2009 and currently appear to be on an upsurge since 2012. 0% 2008 2009 2010 2011 2012 2013 Year

Market Segment Under R250K Betw R250K- R500K Betw R500K - R1.2M Over R1.2M

10.6 Sales by Property Value Sales by Property Value Segments Steve Tshwete, by suburb, 2013 Segments

Kranspoort dorp This map shows the volume of sales activity (the size of the dot) by suburb across the town by property value segment (the slices of the pie). According to data, sales were predominantly in the above R500 000 segment.

The high-midrange properties (the red and orange segments) saw most activity, with the Middelburg SP1 lower priced homes (green) having a smaller Mountain View Middelburg Central portion of the sales activity. This may be a Middelburg Industrial Middelburg Ext. 24 potential sign of active (increased) supply and steady demand for the middle market.

Access to credit is a signiﬁcant boost or barrier Rietkuil SP to housing market growth. While some

Pullens Hope SP suburbs offer a range of housing price options, pinpointing product prices and types to speciﬁc Koornfontein Mine areas, especially considering local affordability, is key to ensuring programme success. Kwazamokuhle SP Hendrina SP

Source: South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry.

Total Residential Sales Property Value Segment 0 Under R250k 100 Between R250k - R500k 200 Between R500k - R1.2m ≥ 300 Over R1.2m

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 10.7 Sales by New and Total Sales by Sales Type Steve Tshwete, 2013 Repeat Sales New and repeat sales 249 Aerorand 117 An important distinction in market 4 Blinkpan SP 2 performance is the sale of new homes 10 Chromville (which have never appeared on the 0 28 deeds registry) and the resale of existing Clubville 2 homes. The chart shows new (green) 59 Dennesig 0 and repeat sales (orange) by suburb. In 37 Eastdene most mining towns, new registrations 15 5 Emaskopasini are clustered in only a few suburbs. 0 46 Steve Tshwete appears to have new Golfsig 2 sales in several subplaces throughout 36 Hendrina SP 2 the municipality. 16 Hlalamnandi 73 90 New sales can also show the recent Kanonkop 4 registration of Government-sponsored 21 Komati SP 10 housing investment. An important Koornfontein Mine point is to recognise the impact

39 Kranspoort dorp of newly registered Government 2 13 investment in housing. Often these Kwazamokuhle SP 0 registrations may be perceived as a 34 Mafred 1 market distortion, but the deeds issued 1 Mapehla on Government-sponsored housing 0 2 represent real assets which now can be Mathaylini 1 traded and loaned against and are key 14 Mhluzi Ext. 2 1 to moving up the housing ladder. Thus, 35 Mhluzi Ext. 3 11 the housing market has in fact grown. 1 Mhluzi Ext. 4 3 Suburbs with no data reﬂect areas with no 8 Mhluzi Ext. 5 & 6 2 sales or new registrations. 5 Mhluzi Ext. 7 0 7 Mhluzi Ext. 8 1 11 Mhluzi SP 3 163 Middelburg Central 25 Middelburg Ext. 24

1 Middelburg Industrial 0 Middelburg Mine

Middelburg SP1

0 Middelburg SP2 0 25 Midlands Estate 16 110 Mineralia 24 3 Mountain View 0 8 Nazareth 1 22 Pullens Hope SP 6 18 Rietkuil SP 2 9 Steve Tshwete NU 32 7 Tokologo 0 7 Tycoon 2 0 20 40 60 80 100 120 140 160 180 200 220 240 260 Total Residential Sales Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry.

Measure Names Total Repeat Sales Total New Sales

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 10.8 Market Activity amongst New and Repeat Sales

In Steve Tshwete, the largest volume of activity has been in Aerorand, Kanonkop, Middelburg Central and Mineralia. The growth and maturity of the subplace’s individual housing market can often be detected by comparing the interaction between new and resale market transactions over time. The growth of existing home sales (the orange line) indicates sustained interest of housing markets by borrowers and lenders.

Mhluzi Ext. 4 3 Often volumes of new Sales Trends by Sales Type 3 2 4 3 Steve Tshwete, 2008 - 2013 2 0 2 1 0 1 homes in prior years New and Repeat Sales 242869 16 12 12 become resales in later 179 249 Mhluzi Ext. 5 & 6 8 Aerorand 186 9 years (for example, 99 81 210 7 0 1 1 1 94 33 2 131 1 117 Kranspoort Dorp’s slight 4 5 7 5 3 Mhluzi Ext. 7 uptick of resales in 2013). Blinkpan SP 3 4 3 02 02 02 0 2 0 0 Understanding how mining 2 2 0 20 9 24 11 companies create new 15 7 Mhluzi Ext. 8 5 Chromville 6 6 units helps one understand 10 1 10 0 0 0 1 1 0 0 60 0 0 4 0 22 their existing and potential 20 20 58 11 Mhluzi SP 15 11 contribution to expanding Clubville 31 41 8 11 28 28 7 23 3 the local housing economy. 1 1 1 1 3 3 5 2 185 59 163 55 61 182 53 52 Middelburg Central 154 49 130 Dennesig 39 71 110 16 16 19 25 0 2 1 1 0 0 14 54 72 72 Middelburg Ext. 24 Eastdene 1 16 37 0 6 1 1 23 4 273 15 0 1 2 1 4 5 2 Middelburg Industrial 2 1 Emaskopasini 1 1 1 0 0 20 0 0 0 0 0 1 0

60 53 44 42 46 Middelburg Mine Golfsig 38 39 5 1 1 2 2 40 33 36 Middelburg SP1 28 Hendrina SP 25 26 14 1 0 0 6 2 73 1 1 1

Middelburg SP2 41 Hlalamnandi 20 0 15 0 0 0 0 7 1 16 180 17 0 10 108 36 111 26 32 19 25 131 27 90 13 Midlands Estate 17 16 99 19 Kanonkop 81 13 13 4 0 0 5 8 4 244 175 33 22 Mineralia 21 116 59 110 Komati SP 133 22 18 11136 11 6 10 105 123 24 2 2 49 6 6 6

Mountain View 4 3 Koornfontein Mine 3 0 02 0 0 0 0 12 46 13 13 30 39 Nazareth 8 6 Kranspoort dorp 30 30 7 3 3 24 13 6 21 8 1 3 3 2 1 2 31 27 28 11 13 2920 22 23 Pullens Hope SP 18 Kwazamokuhle SP 3 4 2 6 5 0 0 0 0 04 0 2 0 43 34 31 29 22 23 Rietkuil SP 18 Mafred 23 22 2 1 9 8 2 3 0 3 0 01 0 1 32

1 21 17 18 1 1 Steve Tshwete NU Mapehla 0 9 0 0 100 0 0 0 1 5

9 7 2 Tokologo Mathaylini 1 1 1 1 3 1 0 03 0 0 0 0 0 1 0 0 18 37 12

22 20 Tycoon 13 7 Mhluzi Ext. 2 22 11 2 3 20 14 1 7 6 2 0 2 1 2 2 2 1 2008 2009 2010 2011 2012 2013 110 Year

Mhluzi Ext. 3 47 Sales Type 35 48 35 Total New Sales 7 4240 8 31 30 11 Total Repeat Sales

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 10.9 Total Sales by Property Value, change from the prior year

This chart shows the change in activity for property sales (ﬁrst two columns) and bonded property sales (third and fourth columns) from 2012 to 2013. It is possible to see important market shifts by comparing the change in activity within particular property markets from one year to the next. Several subplaces have experienced an increase in both sales and bonds from 2012 to 2013, so it is important to note that the highest increase in residential sales was in the under R250 000 value segment, however there were no bonds associated with this value segment.

Suburbs with no information had no residential sales transactions in the past two years.

Market Activity: Total Sales and Change in Sales Steve Tshwete, 2012 - 2013 Change in residential and bonded sales Aerorand 145 220 109 76

Blinkpan SP 6 200% 4 100%

Chromville 6 100%

Clubville 24 21

Dennesig 41 16 36

Eastdene 48 33

Emaskopasini 5 150% 0

Golfsig 32 27 4

Hendrina SP 18

Hlalamnandi 40 40 39 39 225% 550%

Kanonkop 27 67 24 44

Komati SP 750% 8 300%

Kranspoort dorp 31 400% 97 350%

Kwazamokuhle SP 13 225% 1

Mafred 29 1350% 400% -100%

Mapehla -100%

Mathaylini 3 0

Mhluzi Ext. 2

Mhluzi Ext. 3 9 7

Mhluzi Ext. 4 -40% -100%

Mhluzi Ext. 5 & 6 -100%

Mhluzi Ext. 7 5 25% 0

Mhluzi Ext. 8 8 60% 0

Mhluzi SP 7 300% 200%

Middelburg Central 27 133 28 20 76 15

Middelburg Industrial

Middelburg SP2 0 0

Midlands Estate 29 19

Mineralia 122 74

Mountain View -100% Nazareth

Pullens Hope SP 24 18

Rietkuil SP 12

Steve Tshwete NU 35 94% 25 6 317%

Tokologo 7 -22% 0

Tycoon -33% -50% 0 50 100 150 200 250 300 350 0% 500% 1000% 1500% 0 50 100 150 0% 200% 400% 600% Total Residential Sales Change in Residential Sales Total Bonded Residential Sales Change in Bonded Residential Sales

Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry. Property Value Segment Between R250k - R500k Between R500k - R1.2M Over R1.2M Under R250k

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Market Activity: Total Sales and Change from previous year 10.10 Change in New Steve Tshwete, 2012 - 2013 and Repeat Sales Change in new and repeat sales

Aerorand 249 1% 117 -60% This chart shows the speciﬁc Blinkpan SP 4 100% 2 rate of activity of new and

Chromville 10 67% 0 repeat sales from 2012 to 2013. As seen before, new Clubville 28 -52% 2 100% sales are evident throughout Dennesig 59 13% 0 -100% the municipality.

Eastdene 37 -49% 15 -6% Many of these developments Emaskopasini 5 150% 0 built by the Government are Golfsig 46 -13% 2 0% heading into their 8th year and become eligible for resale by Hendrina SP 36 9% 2 their owners. By understanding Hlalamnandi 16 -20% 73 329% when those units come on line

Kanonkop 90 -9% 4 0% for resale, Government can align policies which encourage the Komati SP 21 17% 10 400% sale and development nearby, Koornfontein Mine which can help leverage

Kranspoort dorp 39 30% 2 -75% that prior investment, expand housing options and Kwazamokuhle SP 13 225% 0 stimulate movement up the Mafred 34 1033% 1 next rung on the housing ladder. Resales are an Mapehla 1 0% 0 important means of recycling Mathaylini 2 100% 1 existing homes to make available Mhluzi Ext. 2 14 -30% 1 -50% more housing options.

Mhluzi Ext. 3 35 -13% 11 -74% Suburbs with no information had Mhluzi Ext. 4 1 -67% 3 50% no residential sales in the past

Mhluzi Ext. 5 & 6 8 -33% 2 100% two years.

Mhluzi Ext. 7 5 25% 0

Mhluzi Ext. 8 7 17% 1

Mhluzi SP 11 0% 3 0%

Middelburg Central 163 -10% 25 32%

Middelburg Ext. 24 -100% -100%

Middelburg Industrial 1 0

Middelburg Mine

Middelburg SP1

Middelburg SP2 0 0

Midlands Estate 25 -7% 15 -21%

Mineralia 110 -5% 24 85%

Mountain View 3 0% 0

Nazareth 8 -38% 1 -67%

Pullens Hope SP 22 -19% 6

Rietkuil SP 18 -22% 2 0%

Steve Tshwete NU 9 -50% 32

Tokologo 7 -22% 0

Tycoon 7 17% 2

0 100 200 300 0% 1000% 0 50 100 0% 500% Total Repeat Sales Change in Repeat Sales Total New Sales Change in New Sales

Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 10.11 Average Property Values and Sales Price The relationship between local sales prices (orange lines) and average property values (blue lines) can tell much about the activity and integration of supply and demand. Every house in a suburb has a value, determined by the number of sales, changes in prices, churn (repeat sales) and other factors present in a robust housing market. Only houses which have sold have sales prices, but this lowers the value of homes in markets with fewer sales. As markets formalise and strengthen, these trends inform each other more effectively and the trend lines become almost parallel over time (such as in Blinkpan, Chromeville, Clubville and Dennesig). Almost all the subplaces in the municipality have consistently sold below their value. Sales prices in affordable areas more often reﬂect access to credit rather than interest in the neighbourhood.

Market Activity: Average Property Values and Sales Prices Steve Tshwete, 2007 - 2013 Property value and sales price by suburb R 944K R 1 208K R 808K R 785K Aerorand R 31K R 120K R 85K R 102K R 430K R 554K R 92K R 447K Mhluzi Ext. 5 & 6 Blinkpan SP R 134K R 71K R 269334K R 51K Mhluzi Ext. 7 R 53K R 243KR 194K Chromville R 35K

R 116K R 80K R 1 180K R 1 482500K R 57K Mhluzi Ext. 8 R 949K R 53K Clubville

R 269284K R 193K R 804K R 1 008037K R 769K Mhluzi SP R 146K Dennesig

R 731K R 898K R 646K R 810K R 718K R 697K R 645K Middelburg Central Eastdene R 433K

R 109K R 163K R 72K R 107K Middelburg Ext. 24 R 61K Emaskopasini R 30K R 32K R 20K R 2 150K R 1 055K R 1 356K R 1 155K Middelburg Industrial R 1 001K R 671K Golfsig R 427K R 299K

R 392K R 497K R 418K R 407K Middelburg Mine Hendrina SP

R 275K R 223K Middelburg SP1 R 222K Hlalamnandi R 112K

R 1 309K R 1 026K R 851K R 803K R 910K R 912K R 820K Middelburg SP2 Kanonkop R 420K

R 1 495K R 1 796K R 371K R 471K Midlands Estate R 1 031K R 346K R 347K R 807K Komati SP

R 588K R 737K R 377K R 483K R 529K Mineralia Koornfontein Mine R 193K

R 810K R 1 036K R 225K Mountain View R 159K R 610K Kranspoort dorp R 110K R 102K R 301K R 312K R 419K R 93K R 263K R 57K Nazareth Kwazamokuhle SP R 34K R 50K R 126K

R 365K R 468439K R 149K R 158K R 104K Pullens Hope SP R 248K Mafred

R 21K R 389K R 498K R 171K R 391K R 113K Rietkuil SP R 234K Mapehla R 45K R 55K R 554K R 685K

R 406K Steve Tshwete NU R 348K Mathaylini R 128K R 177K R 85K R 45K R 56K R 72K R 190K R 193KR 137K Tokologo R 153K R 32K Mhluzi Ext. 2 R 25K

R 268K R 339K R 176K R 218K R 254K Tycoon R 149K R 113K Mhluzi Ext. 3 R 176K

2008 2009 2010 2011 2012 2013 Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry. R 171K Measure Names Mhluzi Ext. 4 R 124K Avg Property Value R 80K Avg Sales Price R 31K

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 11. Lending Activity

11.1 Key Findings

Lending is distributed throughout Steve Tshwete by area and loan size. Bonded sales are almost entirely concentrated in housing and sales over R500 000, with those loans concentrated in four central- city higher-priced housing markets. The share of lending by each of the four major banks in the country increased consistently; the share of lending by other lenders has doubled since 2008, perhaps reﬂecting increased mining activity requiring expanded staff deployment, or to make up for the lack of lending growth by the existing institutions.

11.2 Policy Implications

Policies and programmes should target expanding access to credit, including the creation of new funds, with broader investment guidelines and possibilities and small loan programmes with which to make ﬁnancing more accessible to lower income households. Loans to entice the development of more middle market housing would create more integrated markets.

Programmes should also make creative ﬁnancing available for rental projects.

11.3 Quick Deﬁnitions:

Lending Activity: the performance of key lending indicators over time, such as bond volume, new loans and bonded sales, by lending institution.

Portfolio Size: the total number and value of loans given out by particular lending institutions in the study area.

Property Value Segment: in order to better understand the performance of housing markets, data has been aggregated into four property value bands: properties valued under R250 000; between R250 000 and R500 000; between R500 000 and R1.2 million and over R1.2 million. This helps one to understand the various trends and strengths inherent in each segment and to see how properties are integrating across the housing continuum, especially over time.

Residential Bond: a loan made for the intention of acquiring a property, which is secured by the title to the property. These are determined by the property address and the timing with which bonds and sales transactions are recorded on the deeds registry.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report All Loans by Lender 11.4 Lending Over Time Steve Tshwete, 2008 - 2013 Total value of residential bonds by lender R 9 000M Loan data taken from the deeds registry can provide lending

R 8 000M activity by lender, which has

R 2 400M grown consistently in the area.

R 7 000M By comparing the top chart (all R 2 281M loans held by each lender) and the R 2 171M bottom chart (activity by lender R 6 000M per year) it is possible to note that, nds R 2 092M R 1 345M while the lending in the area has R 1 996M R 5 000M R 1 207M R 1 896M consistently grown, the amount idential Bo idential R 1 096M per year varies from lender to R 4 000M R 1 016M R 1 865M lender. For example, annual R 947M

lue of Res of lue R 1 772M R 895M lending has increased among all Va R 1 682M R 3 000M lenders between 2008 and 2013. R 1 610M R 1 514M R 1 423M R 1 780M R 2 000M Of note has been the infusion of R 1 570M R 1 376M other lenders into the area; from R 1 185M R 1 071M R 1 000M R 1 007M 2008 – 2013, lending activity by R 1 253M other lenders has doubled. R 960M R 1 110M R 599M R 745M R 0M R 500M 2008 2009 2010 2011 2012 2013 These other lenders primarily Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry. include companies providing home Banks ABSA loan beneﬁts to their employees. FNB Nedbank This is most often employer- Standard Bank SA Other Lenders assisted lending, primarily from companies providing home loan

New Loans by Lender beneﬁts to their employees. The Steve Tshwete, 2008 - 2013 lending may reﬂect increased Total value of residential bonds by lender mining activity requiring staff

R 750M deployment in the area.

R 700M The following charts explore

R 650M R 119,0M lending by bank and by suburb R 265,4M to understand more speciﬁcally R 600M R 78,8M R 110,2M where bank investment has been R 550M made by suburb and what that

R 80,6M R 138,7M may mean about ﬁnancing R 500M R 110,6M availability for various development R 96,8M R 450M R 72,1M sites and scenarios. R 108,8M

tial Bonds tial R 400M R 92,9M R 68,6M R 90,0M

R 100,0M

Residen R 350M

New R 96,2M R 190,4M R 300M R 165,0M R 52,3M

R 250M R 193,8M R 210,7M

R 91,2M R 200M R 114,3M

R 150M R 147,7M R 64,2M R 100M R 215,5M

R 145,7M R 150,3M R 142,5M R 50M R 98,6M R 64,1M R 0M 2008 2009 2010 2011 2012 2013 Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry.

Banks ABSA FNB Nedbank SBSA Other Lenders

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Market Share by Lender: All Residential Bonds 11.5 New Loans by Lender Steve Tshwete, all loans, by suburb by lender, through 2013 As markets shift, different lenders Kranspoort dorp respond in different ways. These maps show the previous bar charts on a map. The ﬁrst chart – all loans by lender – is represented on the top map. All loans made in 2013 – the second chart – is shown on the lower map. By comparing the two maps, it’s possible to see where lenders invested loans in the Dennesig last year (pies in the bottom map),

Kanonkop and how that has changed from their Mathaylini Mhluzi Ext. 5 & 6 overall portfolio in that suburb (pies Middelburg Central Middelburg Industrial in the top map). Steve Tshwete NU Non-traditional lenders, such as private equity funds and employer lenders, have more flexible regulatory environments Rietkuil SP and more creative, competitive financing tools. It will be important for Government Pullens Hope SP to engage these investors as well to ease access to credit, lower costs of Koornfontein Mine Komati SP financing and share in the commitment Mafred towards growing housing markets in the Kwazamokuhle SP Hendrina SP mining towns.

Source: South African Deeds Registry via Lightstone (Pty) Ltd. All indicators reflect formal market data as reflected on the deeds registry. The areas with no dots have no residential Total Residential Bonds Lenders 0 ABSA properties on the deeds registry – they are 1 000 FNB farms or open space, mines or power plants, 2 000 Nedbank 3 000 Standard Bank or informal settlements. ≥ 3 500 Other Lenders

Market Share by Lender: New Loans 2013 Steve Tshwete, all new loans made, by suburb by lender, 2013

Kranspoort dorp

Dennesig

Mhluzi Ext. 2 Middelburg Central Middelburg Industrial Middelburg Ext. 24

Rietkuil SP

Pullens Hope SP

Koornfontein Mine

Kwazamokuhle SP Hendrina SP

Source: South African Deeds Registry via Lightstone (Pty) Ltd. All indicators reflect formal market data as reflected on the deeds registry.

New Residential Bonds Lenders 0 ABSA 50 FNB 100 Nedbank 150 Standard Bank 200 Other Lenders

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 2013 R 0 R 0 R 0 R 1,199,000 R 1,080,000 Mhluzi Ext. 3 2008 R 3,191,826 R 1,190,000 R 2,073,340 R 1,300,500 R 253,800 2009 R 1,579,800 R 436,800 R 1,778,026 R 859,160 R 1,705,904 2010 R 1,645,466 R 294,000 R 1,619,366 R 3,670,340 R 730,000 New Loans by Lender 2011 R 2,717,900 R 9,155,127 R 1,198,306 R 11,898,849 R 7,804,707 Steve Tshwete, 2008 - 2013 2012 R 1,734,400 R 6,613,588 R 1,501,400 R 10,192,392 R 2,040,000 The value of new bonds by lender by suburb over time 2013 R 1,274,000 R 770,000 R 1,517,700 R 4,936,900 R 2,680,000 Steve Tshwete Mhluzi Ext. 4 2008 R 0 R 0 R 60,000 R 0 Standard Other 2009 R 0 R 0 R 0 R 0 ABSA FNB Nedbank Bank Lenders 2010 R 0 R 0 R 6,807,000 R 0 Aerorand 2008 R 75,861,294 R 25,485,820 R 33,959,222 R 32,946,526 R 13,977,000 2011 R 0 R 0 R 0 R 0 2009 R 19,341,565 R 9,677,100 R 28,175,234 R 18,512,909 R 20,276,800 2012 R 280,000 R 0 R 270,000 R 0 2010 R 21,774,500 R 22,485,603 R 17,788,746 R 23,724,650 R 39,225,000 2013 R 0 R 0 R 280,000 R 0 2011 R 22,476,000 R 32,695,200 R 17,041,955 R 35,211,240 R 55,636,726 Mhluzi Ext. 5 & 2008 R 469,204 R 300,000 R 213,866 R 220,000 R 0 2012 R 30,181,370 R 33,832,250 R 29,792,598 R 54,091,800 R 49,779,557 6 2009 R 0 R 294,499 R 0 R 0 R 0 2013 R 37,967,612 R 45,655,000 R 22,457,750 R 46,330,265 R 41,108,971 2010 R 350,000 R 0 R 0 R 396,000 R 215,000 Blinkpan SP 2008 R 29,012 R 126,909 R 700,000 R 699,600 R 0 2011 R 0 R 0 R 0 R 337,000 R 180,000 2009 R 250,000 R 0 R 0 R 200,000 R 0 2012 R 0 R 0 R 0 R 250,000 R 0 2010 R 380,000 R 0 R 0 R 0 R 0 2013 R 0 R 0 R 0 R 400,000 R 0 2011 R 200,000 R 0 R 0 R 1,750,000 R 800,000 Mhluzi Ext. 7 2008 R 0 R 50,000 2012 R 0 R 200,000 R 0 R 500,000 R 0 2009 R 0 R 0 2013 R 0 R 336,394 R 775,000 R 0 R 0 2010 R 137,063 R 0 Chromville 2008 R 1,147,000 R 522,794 R 1,398,802 R 1,549,000 R 0 2011 R 0 R 0 2009 R 0 R 210,000 R 539,546 R 0 R 0 2012 R 0 R 0 2010 R 1,321,500 R 0 R 1,277,542 R 570,000 R 0 2013 R 0 R 0 2011 R 541,000 R 0 R 0 R 1,107,000 R 410,000 Mhluzi Ext. 8 2008 R 0 R 0 R 551,000 R 0 2012 R 360,000 R 0 R 0 R 850,000 R 390,000 2009 R 0 R 0 R 0 R 0 2013 R 330,000 R 350,000 R 0 R 1,188,000 R 500,000 2010 R 287,000 R 0 R 0 R 0 Clubville 2008 R 12,510,000 R 0 R 6,490,000 R 4,041,500 R 0 2011 R 0 R 0 R 0 R 0 2009 R 6,636,000 R 5,882,000 R 1,926,000 R 3,215,330 R 3,944,000 2012 R 0 R 0 R 0 R 0 2010 R 4,012,000 R 3,595,000 R 6,107,400 R 8,242,500 R 1,100,000 2013 R 0 R 0 R 0 R 0 2011 R 3,893,000 R 6,500,000 R 5,177,700 R 8,297,000 R 12,690,000 Mhluzi SP 2008 R 1,553,200 R 903,200 R 281,940 R 2,335,935 R 286,400 2012 R 12,390,000 R 11,670,000 R 7,525,700 R 12,634,600 R 620,000 2009 R 0 R 277,000 R 1,188,461 R 261,000 R 1,980,000 2013 R 3,855,000 R 4,310,000 R 4,035,700 R 13,874,800 R 8,400,000 2010 R 814,000 R 0 R 1,276,170 R 420,000 R 1,910,000 Dennesig 2008 R 10,174,800 R 3,558,000 R 7,306,609 R 7,232,500 R 3,990,000 2011 R 266,000 R 620,000 R 0 R 1,112,000 R 1,194,600 2009 R 10,685,075 R 3,547,750 R 4,016,220 R 3,312,000 R 3,530,000 2012 R 485,000 R 0 R 161,839 R 1,110,200 R 0 2010 R 7,864,500 R 6,958,500 R 6,121,831 R 5,776,500 R 6,070,000 2013 R 390,000 R 0 R 0 R 1,623,500 R 0 2011 R 3,231,000 R 702,000 R 2,205,700 R 13,421,200 R 8,900,000 Middelburg 2008 R 43,002,799 R 22,907,700 R 31,895,928 R 27,050,199 R 6,735,000 2012 R 5,390,000 R 3,720,500 R 8,084,100 R 12,681,000 R 5,478,000 Central 2009 R 22,876,600 R 1,705,000 R 20,636,981 R 6,350,450 R 8,233,451 2013 R 9,355,000 R 14,035,500 R 7,198,900 R 10,284,900 R 3,720,000 2010 R 16,250,500 R 8,181,000 R 17,012,138 R 9,789,200 R 16,310,000 Eastdene 2008 R 2,365,000 R 2,529,000 R 1,494,389 R 960,000 R 530,000 2011 R 7,123,500 R 5,448,000 R 16,819,233 R 29,879,001 R 11,959,633 2009 R 5,855,500 R 4,003,000 R 4,939,353 R 10,415,140 R 1,000,000 2012 R 23,159,700 R 9,858,000 R 15,133,503 R 15,434,000 R 10,301,500 2010 R 2,919,000 R 1,090,000 R 1,150,000 R 2,538,700 R 4,496,000 2013 R 15,480,300 R 20,940,590 R 16,966,400 R 24,934,346 R 12,370,000 2011 R 1,025,000 R 0 R 1,295,694 R 6,084,500 R 7,576,482 Middelburg 2008 R 0 2012 R 578,000 R 1,885,856 R 1,956,000 R 3,926,900 R 2,490,000 Ext. 24 2009 R 0 2013 R 5,145,502 R 2,985,000 R 3,665,700 R 3,654,558 R 5,722,500 2010 R 0 Emaskopasini 2008 R 120,000 2011 R 0 2009 R 0 2012 R 0 2010 R 0 2013 R 0 2011 R 0 Middelburg 2008 R 0 R 0 R 0 R 0 R 0 2012 R 0 Industrial 2009 R 0 R 0 R 0 R 0 R 0 2013 R 0 2010 R 0 R 0 R 0 R 0 R 0 Golfsig 2008 R 34,945,578 R 15,018,000 R 19,685,114 R 9,459,000 R 0 2011 R 0 R 0 R 750,000 R 0 R 0 2009 R 5,690,000 R 6,094,250 R 5,007,850 R 3,199,500 R 1,695,000 2012 R 0 R 0 R 0 R 0 R 0 2010 R 6,358,361 R 3,737,250 R 2,825,700 R 11,519,000 R 6,400,000 2013 R 0 R 0 R 0 R 9,100,000 R 0 2011 R 2,246,138 R 2,870,000 R 4,243,400 R 6,648,950 R 4,670,000 Middelburg 2008 R 0 R 0 R 0 R 0 R 0 2012 R 9,811,500 R 9,940,000 R 1,411,400 R 13,740,500 R 7,100,000 SP2 2009 R 0 R 500,000 R 0 R 0 R 0 2013 R 11,483,500 R 5,706,000 R 1,150,000 R 12,209,000 R 9,635,000 2010 R 0 R 0 R 0 R 0 R 0 Hendrina SP 2008 R 1,516,500 R 2,730,000 R 8,080,563 R 3,507,500 R 4,080,000 2011 R 0 R 0 R 0 R 0 R 712,000 2009 R 371,000 R 1,265,000 R 947,638 R 836,250 R 4,320,000 2012 R 0 R 0 R 0 R 0 R 0 2010 R 930,250 R 0 R 0 R 1,437,000 R 500,000 2013 R 0 R 0 R 0 R 0 R 0 2011 R 680,000 R 675,000 R 496,000 R 3,710,000 R 1,100,000 Midlands 2008 R 14,211,000 R 2,850,000 R 8,243,860 R 6,450,000 R 300,000 2012 R 900,000 R 550,000 R 536,700 R 2,671,000 R 1,350,000 Estate 2009 R 2,816,000 R 3,095,000 R 1,143,980 R 1,700,000 R 2,910,000 2013 R 1,204,000 R 2,269,000 R 325,700 R 1,960,000 R 812,000 2010 R 5,120,000 R 2,478,750 R 12,354,800 R 10,475,000 R 3,700,000 Hlalamnandi 2008 R 2,786,500 R 0 R 6,274,878 R 3,335,434 R 420,000 2011 R 8,763,074 R 3,725,000 R 4,756,700 R 12,342,560 R 6,750,000 2009 R 2,130,219 R 0 R 0 R 620,500 R 1,089,395 2012 R 8,815,500 R 14,798,479 R 5,500,700 R 9,118,246 R 4,870,000 2010 R 1,161,900 R 1,760,820 R 564,097 R 1,591,700 R 0 2013 R 2,882,000 R 8,526,028 R 6,647,400 R 8,957,000 R 2,040,000 2011 R 0 R 0 R 1,543,930 R 1,352,000 R 1,200,000 Mineralia 2008 R 15,290,434 R 7,084,091 R 14,487,708 R 11,461,926 R 8,261,797 2012 R 819,000 R 190,000 R 1,256,700 R 4,160,967 R 3,990,000 2009 R 8,776,500 R 4,328,000 R 5,450,406 R 5,102,240 R 25,075,000 2013 R 2,063,500 R 3,173,500 R 7,742,350 R 16,104,029 R 8,975,000 2010 R 9,862,991 R 3,799,922 R 3,145,956 R 6,831,000 R 30,795,000 Kanonkop 2008 R 30,260,400 R 13,545,000 R 7,617,341 R 16,445,100 R 6,518,815 2011 R 6,353,250 R 4,553,000 R 4,327,800 R 22,839,522 R 54,516,872 2009 R 7,034,500 R 5,424,700 R 11,916,398 R 6,955,000 R 3,500,000 2012 R 5,261,500 R 2,584,500 R 5,407,800 R 20,036,300 R 31,833,365 2010 R 11,520,300 R 12,101,500 R 21,102,217 R 13,440,000 R 12,097,642 2013 R 10,550,050 R 11,405,730 R 5,445,400 R 15,312,300 R 15,309,000 2011 R 14,690,500 R 12,754,500 R 7,701,631 R 21,707,000 R 15,780,000 Mountain View 2008 R 220,500 R 50,000 R 0 R 500,133 R 0 2012 R 6,628,750 R 12,495,000 R 8,140,700 R 22,668,340 R 8,929,500 2009 R 0 R 100,000 R 0 R 0 R 500,000 2013 R 7,648,900 R 13,079,000 R 8,030,100 R 21,245,550 R 15,610,000 2010 R 255,000 R 0 R 350,000 R 225,000 R 0 Komati SP 2008 R 4,456,000 R 3,872,600 R 3,836,935 R 3,360,000 R 1,230,000 2011 R 987,000 R 0 R 0 R 920,000 R 0 2009 R 714,500 R 220,000 R 1,109,754 R 0 R 540,000 2012 R 0 R 0 R 0 R 342,000 R 0 2010 R 0 R 300,000 R 0 R 750,000 R 1,660,000 2013 R 0 R 0 R 0 R 0 R 0 2011 R 255,000 R 770,250 R 930,009 R 1,621,716 R 2,647,000 Nazareth 2008 R 320,000 R 150,000 R 642,508 R 407,000 R 1,166,690 2012 R 0 R 0 R 365,700 R 3,143,000 R 2,365,000 2009 R 305,000 R 0 R 323,378 R 0 R 0 2013 R 1,094,000 R 1,304,500 R 641,400 R 1,976,200 R 3,100,000 2010 R 0 R 0 R 109,664 R 288,000 R 0 Koornfontein 2008 R 0 R 0 2011 R 1,666,500 R 0 R 0 R 1,072,000 R 0 Mine 2009 R 0 R 0 2012 R 1,543,000 R 350,000 R 0 R 620,000 R 1,850,000 2010 R 0 R 0 2013 R 350,000 R 0 R 650,000 R 0 R 800,000 2011 R 0 R 0 Pullens Hope 2008 R 1,536,000 R 2,452,000 R 2,379,545 R 1,570,680 R 6,368,000 2012 R 0 R 0 SP 2009 R 894,500 R 518,500 R 489,119 R 705,000 R 9,280,000 2013 R 0 R 0 2010 R 671,000 R 0 R 1,518,603 R 880,000 R 5,881,933 Kranspoort 2008 R 4,719,500 R 435,000 R 2,605,064 R 5,705,050 R 0 2011 R 344,000 R 0 R 858,910 R 1,329,000 R 4,169,413 dorp 2009 R 2,645,000 R 2,585,000 R 0 R 500,000 R 400,000 2012 R 0 R 923,750 R 1,582,574 R 420,000 R 6,092,000 2010 R 1,676,500 R 400,000 R 454,218 R 1,668,750 R 1,562,666 2013 R 1,814,000 R 760,000 R 1,397,500 R 1,145,400 R 4,093,000 2011 R 0 R 0 R 830,000 R 4,060,000 R 0 Rietkuil SP 2008 R 2,479,300 R 1,558,755 R 2,339,640 R 2,364,859 R 9,550,000 2012 R 763,000 R 112,500 R 1,005,700 R 0 R 340,000 2009 R 1,073,000 R 895,494 R 786,205 R 400,000 R 7,140,000 2013 R 3,915,000 R 2,309,000 R 360,000 R 3,780,000 R 2,000,000 2010 R 1,005,000 R 0 R 390,334 R 931,500 R 12,160,000 Kwazamokuhle 2008 R 0 R 237,793 R 0 R 80,000 R 0 2011 R 160,000 R 100,000 R 585,000 R 1,458,000 R 15,995,094 SP 2009 R 0 R 187,000 R 0 R 0 R 0 2012 R 0 R 0 R 305,700 R 1,030,000 R 8,515,000 2010 R 0 R 160,000 R 0 R 290,000 R 0 2013 R 425,000 R 326,590 R 735,900 R 1,050,000 R 3,200,000 2011 R 0 R 0 R 0 R 0 R 0 Steve Tshwete 2008 R 702,000 R 950,000 R 602,166 R 1,000,000 R 200,000 2012 R 0 R 0 R 0 R 0 R 0 NU 2009 R 0 R 0 R 482,576 R 210,000 R 0 2013 R 0 R 0 R 0 R 195,000 R 0 2010 R 0 R 0 R 0 R 371,500 R 930,000 Mafred 2008 R 0 R 0 R 0 R 370,000 R 0 2011 R 150,000 R 0 R 755,700 R 187,500 R 0 2009 R 0 R 0 R 0 R 0 R 0 2012 R 0 R 571,250 R 0 R 1,479,000 R 0 2010 R 135,000 R 0 R 0 R 0 R 0 2013 R 1,448,840 R 499,000 R 3,202,024 R 8,719,100 R 1,350,000 2011 R 0 R 0 R 0 R 0 R 0 Tokologo 2008 R 40,000 R 0 2012 R 0 R 0 R 0 R 0 R 175,000 2009 R 0 R 0 2013 R 0 R 0 R 0 R 0 R 0 2010 R 0 R 0 Mapehla 2008 R 0 2011 R 0 R 0 2009 R 0 2012 R 0 R 100,000 2010 R 0 2013 R 0 R 0 2011 R 0 Tycoon 2008 R 80,000 R 370,752 R 273,203 R 602,000 R 200,000 2012 R 0 2009 R 0 R 200,000 R 0 R 357,250 R 0 2013 R 0 2010 R 175,050 R 0 R 254,576 R 600,000 R 0 Mathaylini 2008 R 0 R 0 R 0 R 96,872 R 0 2011 R 288,000 R 0 R 270,000 R 229,000 R 550,000 2009 R 0 R 0 R 0 R 0 R 0 2012 R 0 R 0 R 0 R 835,000 R 0 2010 R 0 R 150,000 R 0 R 0 R 0 2013 R 300,000 R 0 R 0 R 250,000 R 0 2011 R 0 R 0 R 0 R 0 R 0 2012 R 0 R 0 R 0 R 0 R 490,000 Source: South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on 2013 R 0 R 0 R 0 R 0 R 0 the deeds registry. Mhluzi Ext. 2 2008 R 1,568,000 R 0 R 2,102,051 R 1,833,900 R 0 Banks 2009 R 285,228 R 886,180 R 363,899 R 500,000 R 1,530,000 ABSA 2010 R 350,000 R 1,112,000 R 637,000 R 1,091,000 R 0 FNB 2011 R 726,000 R 0 R 300,000 R 1,800,000 R 300,000 Nedbank 2012 R 1,085,000 R 280,000 R 330,000 R 1,588,000 R 1,212,000 Standard Bank 2013 R 0 R 0 R 0 R 1,199,000 R 1,080,000 Other Lenders Mhluzi Ext. 3 2008 32

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 12. Leverage

12.1 Key Findings

The presence of older Government-sponsored units within the municipality represent an important opportunity to leverage that investment in affordable housing in the years ahead, as owners seek to sell and move up the housing continuum if opportunities are positioned properly. About 31% of all registered properties in Steve Tshwete were sponsored by the Government. The value of these homes, if sold in the private market, can be applied towards the cost of a new home.

This situation can be used to drive developers to build more gap housing and ﬁnanciers to ﬁnance RDP acquisition loans.

12.2 Policy Implications

Policies should focus on enticing developers to build more housing in the gap market and encourage lending to the RDP and other lower-cost home markets. Sites could be prioritised, which connect these RDP neighbourhoods to other more active housing markets to encourage mixed income development.

To encourage an increase in the supply of gap housing, Government can unlock sites, supply infrastructure or grants, or hook-up fee discounts. Government can also reduce the cost of construction ﬁnance, which can all be passed down to the buyers in the form of lower sales prices.

Government can create programmes using funds pooled from a range of Government and private sector partners, which provide bonds for small properties and offset risks through loan guarantees, loan loss reserves and interest rate discounts. Funds can also organise to implement homebuyer counselling, debt consolidation and moderate rehab costs of the existing home to ensure loan performance of the portfolio.

These programmes would work together in the mining towns to create better social, housing and economic integration. In Steve Tshwete, this might be those areas between Mhluzi Ext 4 and Komati SP; those higher priced more active markets; and Clubville.

12.3 Quick Deﬁnitions:

Leverage: the ability to use the percentage of the property that has been paid off as a down-payment for another property.

Equity: the value of the residential property less the outstanding balance of the bond. This represents the value of ownership built up in a property and is often used as the down-payment for the owner’s next house purchased up the housing ladder.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 12.4 Equity Fills the Gap Average Equity to Average Sales Price Steve Tshwete, 2013 The value of average home equity related to the average sales price Equity is the value of one’s home less R 785K Aerorand R 781K the amount owed to the lender. The R 447K Blinkpan SP R 480K chart shows the average equity per R 334K Chromville R 207K suburb (the green bar) compared to R 1 482K Clubville R 842K the average sales price per suburb. R 1 008K This helps to show what portion of Dennesig R 654K R 697K the sales price might be paid for by Eastdene R 631K homeowners’ equity. The fact that the R 32K Emaskopasini R 163K equity is much higher than the sale R 1 155K Golfsig R 811K prices highlights that sale prices are R 407K Hendrina SP R 368K dropping significantly, further affirmed R 222K by sale prices which are much lower Hlalamnandi R 55K R 910K than property values. Kanonkop R 643K R 347K Komati SP R 332K If a homeowner in Mhluzi Ext 3 wished Koornfontein Mine R 478K to purchase a home in Komati SP, they R 610K Kranspoort dorp R 903K could sell their home and apply the R 50K Kwazamokuhle SP R 56K funds towards the cost of the new R 21K home, reducing the amount they would Mafred R 155K R 55K have to borrow. Instead of borrowing Mapehla R 170K over R347 000 (the average sales price), R 85K Mathaylini R 172K they would only need about R91 000 R 153K Mhluzi Ext. 2 R 170K (the orange bar in Komati SP minus R 254K Mhluzi Ext. 3 R 256K the green bar in Mhluzi Ext 3). Thus R 80K Mhluzi Ext. 4 R 164K equity makes homeownership in higher R 102K priced neighbourhoods affordable, Mhluzi Ext. 5 & 6 R 118K expanding housing options. Equity R 53K Mhluzi Ext. 7 R 70K closes the housing gap for less R 53K Mhluzi Ext. 8 R 79K affluent homeowners because their R 284K Mhluzi SP R 254K properties are less likely to have R 718K Middelburg Central R 544K a bond and those markets have experienced more appreciation Middelburg Ext. 24 R 109K of value. It is important to Middelburg Industrial R 164K R 2 150K consider this value in addition to a Middelburg SP2 R 1 110K homeowner’s income. R 1 018K Midlands Estate R 1 114K R 529K Mineralia R 395K Equity invested by homeowners also R 102K Mountain View R 217K reduces risk by increasing their R 263K financial stake in their home. This Nazareth R 386K R 439K is the same way upper income families Pullens Hope SP R 352K move up the housing continuum and is R 391K Rietkuil SP R 383K now available at scale for lower income R 406K Steve Tshwete NU R 579K families as well, thanks to the massive R 32K Tokologo R 72K Government investment in homes R 149K Tycoon R 257K for the poor. This requires financing

R 0K R 500K R 1 000K R 1 500K R 2 000K R 2 500K available for the lower income buyers, Avg Sales Price which is something to explore with Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry. lender partners. Measure Names Avg Sales Price Avg Value of Residential Equity While averages in such diverse housing markets are hard to consider meaningfully, the picture does indicate that purchasing power increases – and gaps close – when equity is taken into consideration.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 5 Year Equity Growth 12.5 Accessing Equity Closes Steve Tshwete, 2013 the Housing Gap and Can Rates of equity growth, since 2007 to 2013 Drive Demand

Kranspoort dorp Understanding the difference in equity growth rates on a map allows a better understanding of which property markets can be leveraged to support more new development. Many higher-priced areas have experienced modest equity growth Chromville Mhluzi Ext. 2 Dennesig Tokologo Eastdene (grey areas) – or loss (red areas) – over Mhluzi Ext. 5 & 6 Hlalamnandi Middelburg Mine Nazareth the past ﬁve years, likely due to increasing Aerorand Steve Tshwete NU sales prices (rather than amortisation as new buyers tend to have less equity and this market has been very active recently). Rietkuil SP The greatest equity growth over ﬁve years (green areas and green lines) has been Pullens Hope SP Blinkpan SP in less developed areas with fewer sales Koornfontein Mine Mafred Komati SP Tycoon Emaskopasini and values have accrued to the existing Mapehla Kwazamokuhle SP homeowners. Homes worth less than Hendrina SP R500 000 typically have fewer loans, Source: Stats SA Census, 2011, South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry. a faster-growing value and an initial Total Residential properties Avg value of Equity housing cost that was low or free (thanks 0 1 000 -60,6% 50,0% to Government investment in housing). 2 000 ≥ 3 000 Homebuyers can reduce the amount they have to borrow through savings or the equity in their home, if they have an existing Growth in Equity house which they can sell. This lowers their Steve Tshwete, 2008- 2013 monthly payment or increases the price The change in the value of average home equity from they can afford. Leverage is the practice of 2008 using this equity to increase their housing affordability. This indicator thus becomes 43% very useful for meeting – and closing – the housing gap. y 40% Constraints to using leverage in affordable

Equit 35% housing markets include the availability of 31% credit for potential buyers to pay the full ntial ntial 30% value of the house; maximising the equity available to the homeowner; the availability side of homes up the housing ladder to buy and 23% 25% in the case of RDP owners, the ability to

of Re of 20% sell Government-subsidised stock (which comes with an eight-year resale restriction).

alue 14% 16% Other constraints include household indebtedness and the willingness of existing homeowners to sell their most e in V in e 10% 10% important asset. 4%

hang

C However, policies that address these 0% 4% 0% constraints can expand the housing ladder 0% in remarkably quick and cost-effective 2008 2009 2010 2011 2012 2013 ways. Closing cost assistance, interest rate write downs and loan loss funds all Source: SA Deeds Registry via Lightstone (Pty) Ltd., 2015. All indicators reflect formal market data as reflected on the deeds registry. cost a fraction of new construction and put the opportunity – and choice – in the Change in Equity hands of the homeowner, rather than Affordable properties (under R500 000) the Government. All residential properties 35

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 13. Affordability Proﬁle

13.1 Key Findings

Steve Tshwete’s affordability ratio is 1.93 and is below the mining town average of 3; this means that it takes 1.93 times the average monthly income to afford the average house in Steve Tshwete. Despite an above-average monthly income, there remain large disparities among incomes and affordable housing access in certain areas within the municipality.

In some areas, sales prices are very low, probably the result of lack of credit access forcing sellers to sell for whatever cash might be offered regardless of how much the house may be worth.

13.2 Policy implications

Affordability constraints, due to below-average incomes, can be addressed through housing strategies and solutions which propose creative ﬁnancing tools and techniques which can reduce ﬁnancial barriers (such as down-payments, interest rates and principal requirements) as well as unlocking equity, rather than simply trying to push costs down.

Lowering the cost of ﬁnancing can also increase the amount that can be borrowed, which can increase sales prices and the amount of equity a home seller will be able to access to buy their next home.

Lack of adequate affordable supply in areas with very low incomes can often be quickly addressed through the carefully considered provision of well-located quality rental housing.

13.3 Quick Deﬁnitions:

Affordability: affordability is generally deﬁned as the ability to allocate less than 25-30% of a household’s monthly income towards housing costs. While, upper-income families’ incomes enable them to cover the cost of producing and selling housing units and thus provides many housing options, lower-income families struggle because their income often does not adequately cover the cost of producing and selling a housing unit. Supply is limited and others must collaborate to provide decent affordable housing.

Affordability Ratio: the purchasing power of local incomes to afford local sales prices. The local average sales price is divided by the target house price. This shows the relationship between local incomes and local sales prices – a larger number means that local sales prices are harder for local incomes to afford, implying a mismatch between local housing options and residents.

Housing Gap: the shortfall between the target house price a household can afford and the sales price (or construction cost) of a house. This can be calculated by the difference between the target affordable price and the cost or price of the house.

Target House Price: the sales price affordable to local households, which is calculated using the average area median income available for housing (25% of monthly income) using standard underwriting criteria (typically 20 year amortisation at 11%, with 5% down).

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Mind the Gap Table 13.4 Affordability Steve Tshwete, 2013 Affordability indicators per suburb Actual affordability relies on

Avg Monthly Target house Average Affordable Affordability understanding local household income Subplace Name Income price Sales Price Price Gap Ratio to determine what is reasonably afforded by existing residents, how Aerorand R 39K R 1,031K R 785K R 246K 0.8 much of a gap exists and what is Blinkpan SP R 10K R 255K R 447K R -192K 1.8 required to ensure more realistic Chromville R 17K R 453K R 334K R 119K 0.7 affordability. The Affordability Ratio is

Clubville R 31K R 827K R 1,482K R -655K 1.8 determined by dividing the purchase price affordable to the average Dennesig R 33K R 876K R 1,008K R -132K 1.2 household income by the average Eastdene R 16K R 421K R 697K R -277K 1.7 sales price. Nationally, it takes three

Emaskopasini R 7K R 184K R 32K R 153K 0.2 times the average income to afford the average sales price; within the Golfsig R 41K R 1,070K R 1,155K R -86K 1.1 mining towns, this ratio averages Hendrina SP R 16K R 413K R 407K R 6K 1.0 2.8 – Steve Tshwete’s affordability Hlalamnandi R 13K R 342K R 222K R 120K 0.6 ratio is 1.93. This doesn’t mean that families are paying that, it means that Kanonkop R 32K R 854K R 910K R -55K 1.1 most homes on the deeds registry are Komati SP R 15K R 389K R 347K R 42K 0.9 not affordable to the majority of South Koornfontein Mine R 12K R 322K Africans. This indicator provides an important benchmark, by providing a Kranspoort dorp R 13K R 341K R 610K R -269K 1.8 sense of affordability levels and how Kwazamokuhle SP R 5K R 123K R 50K R 73K 0.4 well local markets might be meeting Mafred R 8K R 222K R 21K R 201K 0.1 the needs of local residents.

Mapehla R 15K R 396K R 55K R 341K 0.1 In Steve Tshwete, there appear to Mathaylini R 11K R 292K R 85K R 207K 0.3 be gaps in affordability in some Mhluzi Ext. 2 R 7K R 183K R 153K R 30K 0.8 subplaces, as highlighted by

Mhluzi Ext. 3 R 13K R 331K R 254K R 77K 0.8 the negative price gaps, i.e. the amount by which local sales prices Mhluzi Ext. 4 R 5K R 128K R 80K R 48K 0.6 are higher than what’s affordable Mhluzi Ext. 5 & 6 R 5K R 121K R 102K R 19K 0.8 to local residents. This is speciﬁcally Mhluzi Ext. 7 R 8K R 202K R 53K R 149K 0.3 in Middelburg Industrial, Mhluzi SP and Kranspoort Dorp where price Mhluzi Ext. 8 R 6K R 148K R 53K R 95K 0.4 gaps are negative, perhaps the result Mhluzi SP R 8K R 212K R 284K R -72K 1.3 of more recent housing development Middelburg Central R 25K R 656K R 718K R -62K 1.1 which drove up recent sales prices past income levels. The Steve Tshwete Middelburg Ext. 24 R 5K R 134K NU represents all the non-urban areas Middelburg Industrial R 3K R 76K R 2,150K R -2,074K 28.4 surrounding the town, so it’s not Middelburg Mine R 8K R 214K possible to pinpoint why or where

Middelburg SP1 R 2K R 63K prices and incomes are so unbalanced.

Middelburg SP2 R 20K R 533K The introduction of new products Midlands Estate R 30K R 789K R 1,018K R -228K 1.3 or strategies is more likely to be Mineralia R 26K R 695K R 529K R 166K 0.8 sustainable if they are responsive to current residents. The target Mountain View R 6K R 167K R 102K R 65K 0.6 home price in column 2 can also be Nazareth R 11K R 287K R 263K R 25K 0.9 compared to estimated potential per- Pullens Hope SP R 14K R 373K R 439K R -66K 1.2 unit construction costs to determine the amount of subsidy which may be Rietkuil SP R 14K R 372K R 391K R -19K 1.1 required to build and sell the units to Steve Tshwete NU R 7K R 175K R 406K R -230K 2.3 local residents. Tokologo R 5K R 145K R 32K R 113K 0.2

Tycoon R 7K R 190K R 149K R 41K 0.8

Source: StatsSA Census 2011 (with CPI increase); South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Mind the Gap Chart 13.5 Mind the Gap Steve Tshwete, 2013 Affordability indicators per suburb

Aerorand R 39K R 1,031K R 785K R 246K 0.8 This chart is identical to the

Blinkpan SP R 10K R 255K R 447K R -192K 1.8 previous chart but shows bar lines to better visualise difference Chromville R 17K R 453K R 334K R 119K 0.7 across the area. These tables Clubville R 31K R 827K R 1,482K R -655K 1.8 measure relative affordability for Dennesig R 33K R 876K R 1,008K R -132K 1.2 each suburb in the target area Eastdene R 16K R 421K R 697K R -277K 1.7 in three ways: starting with the Emaskopasini R 7K R 184K R 32K R 153K 0.2 average income (column 1), it Golfsig R 41K R 1,070K R 1,155K R -86K 1.1 calculates the average sales price Hendrina SP R 16K R 413K R 407K R 6K 1.0 affordable to the average family Hlalamnandi R 13K R 342K R 222K R 120K 0.6 using standard underwriting terms Kanonkop R 32K R 854K R 910K R -55K 1.1 (5% down, 11% for 20 years, up Komati SP R 15K R 389K R 347K R 42K 0.9 to 25% of household income,

Koornfontein Mine R 12K R 322K column 2). It compares that to the

Kranspoort dorp R 13K R 341K R 610K R -269K 1.8 area’s average sales price (column

Kwazamokuhle SP R 5K R 123K R 50K R 73K 0.4 3). Column 4 (“Affordable Price

Mafred R 8K R 222K R 21K R 201K 0.1 Gap”) shows the difference between the average sales price Mapehla R 15K R 396K R 55K R 341K 0.1 and the local target (affordable) Mathaylini R 11K R 292K R 85K R 207K 0.3 house price. Column 5 divides the Mhluzi Ext. 2 R 7K R 183K R 153K R 30K 0.8 two values to show the affordability Mhluzi Ext. 3 R 13K R 331K R 254K R 77K 0.8 ratio, the number of times it might Mhluzi Ext. 4 R 5K R 128K R 80K R 48K 0.6 take the local income to afford the Mhluzi Ext. 5 & 6 R 5K R 121K R 102K R 19K 0.8 local sales price. As an example, Mhluzi Ext. 7 R 8K R 202K R 53K R 149K 0.3 in Middelburg Industrial, it takes Mhluzi Ext. 8 R 6K R 148K R 53K R 95K 0.4 28.4 times the average income to Mhluzi SP R 8K R 212K R 284K R -72K 1.3 afford the average sales price.

Middelburg Central R 25K R 656K R 718K R -62K 1.1

Middelburg Ext. 24 R 5K R 134K In Steve Tshwete, the average

Middelburg Industrial R 3K R 76K R 2,150K R -2,074K 28.4 income is about R12 500, the

Middelburg Mine R 8K R 214K average target house price is

Middelburg SP1 R 2K R 63K R330 000 (how much house

Middelburg SP2 R 20K R 533K that income can afford) and the average sales price is R637 000. Midlands Estate R 30K R 789K R 1,018K R -228K 1.3 Thus, in 2013, it took 1.93 Mineralia R 26K R 695K R 529K R 166K 0.8 times the average income to Mountain View R 6K R 167K R 102K R 65K 0.6 afford the average house. Nazareth R 11K R 287K R 263K R 25K 0.9 These very high level indicators Pullens Hope SP R 14K R 373K R 439K R -66K 1.2 are useful when comparing Rietkuil SP R 14K R 372K R 391K R -19K 1.1 affordability, to see which areas Steve Tshwete NU R 7K R 175K R 406K R -230K 2.3 are more or less affordable. Tokologo R 5K R 145K R 32K R 113K 0.2 This helps one to understand Tycoon R 7K R 190K R 149K R 41K 0.8 Avg = R 14K Avg = R 375K Avg = R 452K Avg = 1.7 how housing strategies need to R 20.0K R 40.0K R 0K R 1,000K R 0K R 3,000K R -2,000K R 0K 0.0 10.0 20.0 30.0 address affordability within the Avg Monthly HH income Target house price Avg Sales Price Affordable Price Gap Affordability Ratio town, including what resources Source: StatsSA Census 2011 (with CPI increase); South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry. or policies might be required to help ﬁll these gaps (i.e. affordable ﬁnancing, buyer subsidies).

When affordability is an issue, perhaps equity of existing homeowners can help fund the gap. Policies will need to encourage the sale of lower cost homes that can allow housing purchases further upstream for lower income households.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 13.6 Mapping Affordability

These maps show the importance of taking local household income, or purchasing power, into the understanding of affordability. The ﬁrst map shows average sales prices by suburb, with the darker areas having higher prices. The second map shows the same area by affordability ratio, the darker areas (those with higher affordability ratios) showing greater difference between suburb incomes and suburb sales prices. While some areas appear affordable by sales price (such as Ruitkeil, on the ﬁrst map to the left), they are not as affordable when considering local incomes (the darker green on the second map). These analyses do not take into account the indebtedness of potential buyers, an important factor in determining bond eligibility. Rental housing, therefore, might be an important option towards providing well-located and professionally managed affordable housing in those areas.

The areas with no dots have no residential properties on the deeds registry – they are farms or open space, mines or informal settlements.

Affordable Suburbs by Average Sales Price Steve Tshwete, Suburbs by average sales price and household size, 2013

Kranspoort dorp

Dennesig

Mhluzi Ext. 2 Kanonkop

Hlalamnandi Golfsig Tokologo Clubville Nazareth Midlands Estate Middelburg Industrial Steve Tshwete NU Affordable Suburbs by Affordability Ratio Middelburg Ext. 24 Steve Tshwete, by suburb, 2013 Relationship between average income and sales price (higher is less affordable)

Middelburg SP1

Mountain View Middelburg Central Middelburg Industrial

Middelburg Ext. 24 Rietkuil SP

Pullens Hope SP Rietkuil SP

Blinkpan SP

Pullens Hope SP Komati SP

Emaskopasini

Kwazamokuhle SP Koornfontein Mine Komati SP Hendrina SP Emaskopasini Kwazamokuhle SP

Source: Stats SA Census, 2011, South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry. Source: Centre for Affordable Housing Finance in Africa, with StatsSA Census 2011 (with CPI increase); South African Deeds Reg- Total Residential properties Sales Price istry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry. 0 Total Residential properties Affordability Ratio 20 000 1 000 000 1 000 0 0,1 3,0 2 000 1 000 ≥ 3 000 2 000 3 464

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 14. Rental Index

14.1 Key Findings

In Steve Tshwete, 42% of households rent, according to the 2011 StatsSA census, which is midrange amongst the 22 mining towns. Mhluzi SP is the only subplace which scored high on the rental indicator, highlighting that it has good potential for rental housing.

The opportunity for rental housing development within Steve Tshwete is strong for speciﬁc areas, e.g. Mhluzi SP. Those areas with greater density, modest incomes and affordability challenges are more likely to support quality, professionally managed affordable rental housing. Rental housing also provides ﬂexibility to employers and workers as mining markets expand and contract from time to time.

14.2 Policy Implications

Due to the cyclical, commodity- and demand-driven nature of these towns’ primary industry, rental housing becomes a very important housing solution.

The densifying of housing markets requires infrastructure upgrades and ﬁnancial mechanisms which provide for long-term affordability and sustainability.

14.3 Quick Deﬁnitions:

Rental Index: A tool used to measure the potential suitability of local areas for rental housing, as measured by a group of ﬁve indicators which support rental housing including density, area median income, the affordability ratio and market growth as measured by the housing performance index. A higher score implies greater success for rental housing.

Affordability Ratio: the purchasing power of local incomes to afford local sales prices. The local average sales price is divided by the target house price. This shows the relationship between local incomes and local sales prices – a larger number means that local sales prices are harder for local income households to afford, implying a mismatch between local housing options and residents.

Area Median Income: the percentage of the average local income to the municipal average income, which allows for understanding of the income relative to the market overall and across many municipalities.

Housing Performance Index: the growth of the local suburb in six key housing market indicators as compared to the municipality growth. A higher number implies more growth.

Percent Households Renting: the number of surveyed households that rent divided by the total number of households per StatsSA census 2011. This includes everything from bedrooms and backyard shacks to single family homes and sectional title units.

Population Density: the number of people per square hectare of the suburb, as provided by StatsSA.

Tenure: the terms under which land or buildings are held or occupied, e.g. rental, ownership, etc.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 14.4 Rental Housing: Driving Rental Index Steve Tshwete, by suburb, 2013 an Affordable Housing Option Those suburbs with a higher likelihood of rental demand Rental housing is one of the most efficient and effective ways to provide affordable accommodation. In most South African towns, this means backyard shacks, an important but very inefficient means of Middelburg SP1 meeting housing needs. While there exists Dennesig a social housing sector which targets low income families in multi-unit buildings, these Kanonkop Mhluzi SP are primarily in large metropolitan areas. Many private developers and investors Eastdene Tokologo are considering expanding significantly into the rental segment. If the demand Hlalamnandi is better understood, Government can meet housing backlogs quickly and Aerorand Middelburg IndustrialNazareth affordably by promoting policies which target affordable rental housing.

Middelburg SP2 Middelburg Ext. 24 Mhluzi SP is the only subplace which scored high on this rental indicator, Steve Tshwete NU highlighting that it has good potential for rental housing.

Source: South African Deeds Registry via Lightstone (Pty) Ltd, 2015. All indicators reflect formal market data as reflected on the deeds registry. Several conditions are crucial for the creation Number of Residential properties Type Rental Profile p of successful and sustainable rental markets: 0 Informal Settlement High Info al e n 1 000 Mines Low density, high demand and affordability. 2 000 By using existing housing performance 3 464 indicators, it is possible to prioritise the presence of those indicators intentionally to pick up those areas primed for rental housing. In order to sustain rental housing Rental Index Method Implies Weight at scale, projects must be able to achieve Indicator density to keep costs down and access 80 - 120% area median ready markets, with good proximity to jobs, Median Income Affordability 35% transport and educational opportunities to income keep projects running smoothly. Population Density Exceeds metro average Density 35% Housing 14.5 Locating Rental Growing Demand 15% Performance Index Housing Markets Ratio exceeds metro Affordability Ratio Affordability 15% average Security of tenure through a lease agreement that means residents have assurance of quality property management, consistent utility access and can even build up their credit history with positive rent and utility accounts. Owners of rental housing must locate their properties competitively to ensure monthly occupancy, rental housing must provide affordable access to transport hubs, jobs and community service.

By bundling a set of housing market indicators, it is possible to ﬁnd those places where a rental strategy might be well- suited. The map shows those areas with above-average densities, moderate incomes and above-average households that are currently renting all important factors when considering the placement and promotion of rental housing.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 15. Key Concepts

The deﬁnitions of the concepts used in this proﬁle are set out in alphabetical order below.

15.1 Affordable

Traditionally, affordable refers to housing or areas with prices or values below the overall market which target below- average incomes. It is often deﬁned as R500 000 or less (but can be higher or lower depending on intent) because this is the amount that a household earning less than R16 000 on average can afford, the target limit of many Government subsidy schemes. Affordability is the relationship between the cost of housing (a mortgage bond payment or rent) and the income of the tenant or owner. Affordable housing is that which can be rented or purchased within certain constraints in this report, with a mortgage equal to 28% of the borrower’s income, at 11% over 20 years, with 5% of the sales price paid as down payment. Areas where the average income can afford the average sales price or more are considered affordable.

15.2 Affordability Ratio

This ratio measures relative affordability by comparing the AVERAGE sales price to the average income within the same area – higher ratios meaning less affordability. The average sales price is divided by the AFFORDABLE sales price, which is calculated as the present value of typical mortgage terms using 28% of the average income (95% of the average sale price, at 11% for 20 years). A ratio of 1 means that the average home price is exactly equal to the average household income. Ratios over 1 represent the number of times by which the average income must be increased to afford the average home.

15.3 Appreciation

The rate, or percent change over time between two values (most often price or value) is calculated by dividing the difference between the beginning and end values of the property in the timeframe by the beginning value. The result is the percent by which the property value or price changed. It is a valuable means of comparing the rate of change across very different property markets, areas or market sizes.

15.4 Average

The result obtained by adding several amounts together and then dividing this total by the number of amounts. For instance, average sales price is calculated by adding up all sales within an area and dividing this total by the total number of sales within an area. The average is useful for comparing and understanding different areas, market sizes, and property types.

15.5 Benchmark

An indicator that is calculated in the same way across a larger level (such as national or municipal levels) to compare with smaller areas (such as main places or suburbs). Benchmarks are useful for understanding the performance of housing markets because they provide a consistent means of comparing markets to each other and to larger areas. For example, local markets perceived as having modest appreciation rates may actually be growing quickly when compared with other areas, the metro or the country as a whole. Benchmarks are a key component of the Housing Performance Index, which uses them to determine whether local areas or metros are changing faster than; about the same as; or slower than the metros or the country.

15.6 Bonded Sale

A sales transaction transferring ownership of a property, which includes an associated mortgage bond used by the buyer to purchase that property and which the lender requires to be secured by that property. Bonded sales reﬂect lender investment in an area and perceptions of market strength and risk levels.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 15.7 Churn

This refers to the total number of homes sold within an area over a one-year period divided by the number of homes within that area. Similar to turnover, churn represents active market interest, a large pool of eligible buyers and willing sellers, and ready access to mortgage financing. In affordable areas, lower churn can reflect reduced housing mobility rather than less marketability, as the result of fewer upward housing options for potential sellers, and less access to bond financing for potential buyers. Other indicators (such as bond rates or types; loan to values; equity rates and income) can help differentiate marketability from pent-up market mobility.

15.8 Equity

The value of ownership interest in a property, primarily the current VALUE of a property minus the current value of any bonds or other claims on the property. Equity value grows as mortgage balances are paid down and property values increase. Equity is realised when a house is sold and is most often used to purchase another property, by either increasing the amount available to purchase or lowering monthly mortgage payments (or both). Individual circumstances within neighbourhoods may vary widely, but areas with higher aggregate levels of equity represent greater opportunity for upward mobility, both for existing residents who can sell and invest the equity in a new home and for lower income households able to purchase the existing home.

15.9 Equity Growth

The rate at which an owner or investor’s equity value has changed over time, calculated by dividing the difference between the values of equity at the beginning and end of the period by the beginning year’s equity value. Growth in equity (along with income levels) can be used to determine market potential, as equity signiﬁcantly boosts the purchasing power of potential buyers. Circumstances that increase equity return include prices that appreciate faster than debt is paid down, less debt, and registrations of new properties with no debt.

15.10 Formal Housing Market

A formal housing market is an area where owners sell or otherwise transfer residential properties (which have been registered on the national title and deed registry) to willing buyers who become the legal owners of those properties. Housing markets also include residences that are rented, traded, bartered or otherwise swapped, or legally occupied. This report tracks formal housing markets, as it only uses actual sales reﬂected on the South African deeds registry. It is estimated that 25–50% of all properties in South Africa are not registered.

15.11 Government-sponsored housing

Housing which was created through some government intervention, from site and infrastructure provision, direct construction or ﬁnance, such as Site & Service, RDP and BNG. While these homes are not recorded as such on the deeds registry, their presence is estimated based on surrounding registrations, timing, prices, and volume of activity.

15.12 Housing Continuum

The housing continuum includes all ranges and options of housing, from temporary shelter and informal housing to the highest variety of housing ownership and occupancy models and prices. A continuum implies a continuous, connected marketplace of housing options, which serve the full range of conceivable housing demands as people’s lifestyles and life circumstances change over time. In reality, most housing markets are an uneven distribution of housing supply and housing demand.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 15.13 Leverage

Leverage is the practice of purchasing something by borrowing part of the total cost and is measured by the degree to which a buyer has borrowed funds to purchase a home. Also called gearing, leverage can be measured in several ways (such as loan to value or equity ratio), but all compare bond amounts to the housing value. Generally, homes or neighbourhoods that are highly leveraged are understood to be higher risk because owners lose less equity if they default. Areas with lower leverage rates are generally considered more attractive because lenders have less risk, while owners have more invested and have more potential EQUITY to invest in new housing options.

15.14 Market Segment

This refers to the aggregate of all properties within a certain rand value. Properties are aggregated by their VALUE to better understand the unique dynamics of these market segments. Values are divided into three bands: values under R250 000; between R250 000 and R500 000; and above R500 000. Generally, properties at or below R500 000 are considered affordable because the estimated monthly housing cost (R15 000 to R16 000) is considered the maximum income eligible for many Government subsidy programmes, above which potential buyers must access the unsubsidised housing market.

15.15 Market Share

Market share is the percentage of a market accounted for by a speciﬁc entity in that market. Lending market share is determined by the number of all loans in an area or bond portfolio, originated, or held by a single institution, divided by the total number of bonds in the area or portfolio. Market share can reﬂect the business model or the prevailing attitudes of particular lenders towards opportunity within certain areas. Lenders track their market share by area and value carefully: too high could mean that they are at greater risk if values decrease, while too low means that the lender may be losing business to competitors.

15.16 Rental Index

A score calculated for each suburb, to measure the potential suitability of local areas for rental housing, as measured by a basket of six indicators, which are more favourable towards rental housing. A higher score, between 1 and 10, implies a greater likelihood of success. These indicators include density; the number of households currently renting; area median income; the affordability ratio; households to properties ratio and market growth as measured by the Housing Performance Index. The index gives higher weight to aspects more suitable to rental housing, such as density and income, and moderate weight to the current number of households renting (as reported to the census), the local income as a percentage of the municipal median income, affordability (the relationship between local incomes and sales prices), and the number of households in the area to formal housing units on the deeds registry.

15.17 Suburb

A neighbourhood (within or beyond the central metropolitan area), with an identiﬁable name, often socially accepted borders and common characteristics. This report uses suburb boundaries as established and demarcated by StatsSA (and referred to in its documentation as sub-places). In 2011, there were about 22,000 sub-places within South Africa.

15.18 Value or Worth

The value of a property as determined by several factors, including recent comparable sales nearby; CHURN; lending activity in the area; speciﬁc and area property details, such as the size, age, and amenities. A property’s worth is often related to the amount of information available to make an appropriate determination, which is a contributing factor in undervaluing affordable areas where details on formal market activity is inconsistent. This study uses Lightstone’s (www.lightstone.co.za) proprietary valuation methodology to determine value.

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report 16. Source List

•฀ ARM Coal. (2006). Xstrata Coal South Africa and ARM Coal Site Visit. [PowerPointslides] November 2006, Xstrata Coal. [O]. Available at: http://www.arm.co.za/im/ﬁles/presentations/2006/xstrata_armcoal_ visit06nov06.pdf Accessed 05 February 2015 •฀ Africa Mining IQ. [sa]. Coal Mining in South Africa. [O]. Available. http://www.projectsiq.co.za/coal-mining- in-south-africa.htm. Accessed 09 February 2015 •฀ Exxaro. [sa]. Our People. [O]. Available. http://www.exxaro.com/index.php/sustainability/people-development/#20 Accessed 09 February 2015 •฀ Anglo American. 2011. The A Magazine: Partnership for Success. [O]. Available. http://southafrica.angloamerican.com/media/~/media/1AE5E719F7AB44B790756A552900D6B6.pdf Accessed 09 February 2015. •฀ Steve Tshwete Local Municipality. Steve Tshwete Local Municipality 2014/2015 Draft IDP. Steve Tshwete •฀ Venter. V. 2008. Steve Tshwete Local Municipality Economy Document. Middelburg Chamber of Commerce and Industry. Steve Tshwete

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report Notes

The Housing Development Agency | Steve Tshwete Mining Town Housing Market Report

Department of Human Settlement The Housing Development Agency (HDA) 240 Justice Mahomed Street 6 - 10 Riviera Road Govan Mbeki House Riviera Ofﬁce Park, Block A Sunnyside, Pretoria Killarney 0002 Johannesburg, 2193

Private Bag X645 (Minister) PO Box 3209 Pretoria Houghton, South Africa, 2041 South Africa, 0001 Phone: +27 11 544 1000 Phone: +27 12 421 1311 Fax: +27 11 544 1006/7 Website: www.dhs.gov.za Website: www.thehda.co.za