The importance of real estate as a wealth creator is underscored by new research that reveals that the total value of all bricks and mortar in SA has risen nearly R1 trillion (or close to 20%) over the past five years.
Figures released by the Property Sector Charter Council earlier this month show that the estimated size of the SA property sector has grown from R4.9 trillion at the end of 2010 to R5.8 trillion at the end of 2015. That includes all types of property — from houses and shopping centres to office blocks and vacant land — whether owned by private individuals, companies (JSE-listed or unlisted), institutions or the state.
The study reveals that residential buildings still account for nearly three-quarters of all property owned in SA. The value of SA’s housing sector (excluding houses in informal settlements) grew from an estimated R3 trillion to R3.9 trillion.
Retail property is the second-largest subsector of SA’s broader property market, with a total value of R534bn (R340bn in 2010), followed by office buildings at R357bn (R228bn) and industrial properties at R281bn (R187bn). Hotels and other properties accounted for R94bn (R25bn).
The research also revealed that private individuals own the majority of residential properties. In the commercial sector (including offices, shopping centres and industrial buildings), corporates own nearly R790bn out of a total R1.3 trillion. The JSE’s real estate investment trust (Reit) sector is the second-largest owner of commercial property, with a total value of R300bn. The rest is split between unlisted property funds (R130bn) and life and pension funds (R50bn).