House price increases in low-income areas make no sense

THE high cost of housing in Cape Town is of great concern. Prices have increased with large percentages over the past 10 years, especially in low-income areas.

These sharp annual increases are a huge contributor to housing becoming more unaffordable, and more people having to rely on the government to rather provide them with RDP housing.

Decent three-bedroom houses in the gang-infested, crime-ridden areas of the Cape Flats is already costing around R800 000. How long will it take buyers of these properties to settle this amount? Many of these homeowners will be unable to pay off their bonds within the settlement period.

In most working-class areas such as these, people are paying R3 000 and more per square metre. Take a place such as Eastridge in Mitchells Plain, for example: besides the shopping malls, transport facilities, minimal home improvements, nearby hospitals and vandalised schools, what is actually driving this high cost of housing?

These facilities have been around for many years, before housing prices started reaching such exorbitant levels. Most of these houses were constructed 30 years ago, thus construction costs cannot also be a significant factor. There has also always been a high demand for housing in low-income areas such as these. Are these high prices then justified? Given the poor conditions of working-class areas, are buyers really getting their money’s worth?

Is someone or a group of people perhaps getting rich at the huge expense and burden of others? Can buyers in these areas really be confident that no price-fixing was involved with the sale of their housing? Large-scale collusion in various industries, including the construction sector, has come to light in recent years. Is the Western Cape real estate and housing sector free from such practices? Has the time perhaps come for the Competition Commission or Consumer Protector’s Office to look into this matter? G Contaldi Tafelsig