 Well, let's get started with our conversation this evening. It's one that I tend to nerd out over, but it really will be giving us great insights on the state of the national housing market. We're going to look at the slightly lower end of the market when we talk about the housing market and really getting great insights on what the housing market is in that particular grouping, but also looking at government subsidy housing and some of the key things that this research industry that we're going to be speaking to has found in that regard. And I'm joined this evening by Alison Jangana, who's the head of research and market intelligence at the Center for Affordable Housing Finance in Africa. Alison, good evening and thank you so much for joining us on the show. Thank you very much for having me. It's nice to be here. It's such a pleasure to have you with us, Alison. Alison, I think a good starting point before we even look at what the housing market is like in 2022. Perhaps just paint a picture of what the housing market in that lower segment has been some of the trends probably in the past five, even 10 years, because I think oftentimes when we have conversation about trends and some of the key things that we see, key drivers that we see and behaviors that we see, we tend to neglect that lower segment. We talk a lot about that middle segment and even the highest segment and really don't give as much love to the lower segment and understanding what happens there. And the reality is some of our viewers at home are property investors who do cater for that segment. So understanding also what are some of the pressure points in that particular segment is, what are some of the trends in that segment become such an important part of really getting a full picture of the overall housing market in the country. Sure, thanks. And I think, well, when we do our research at CAF, we use DEEDS data. So we're looking at the properties that are on the DEEDS registry, which means that if we're talking about the lower end of the market, we're excluding and this is important to point out right from the beginning, we're excluding informal settlements and we're excluding backyard rental. So what we're looking at is formally registered properties, but more at the lower end of the market. And if we look at the overall market in South Africa, we have about 6.7 million residential properties, which are valued at around 5.96 trillion rand. So that's where we're sitting as a whole. And what we try to do is to understand that market in terms of segments. So not as a whole, but thinking really about the different nuances in the market segmentation. So if we look at that, we actually see that about 32% of those properties, so almost a third, are actually valued less than 300,000 rand. These aren't the high end properties. A third of the properties in South Africa, one in every three essentially, is valued less than 300,000. But these aren't the properties you see advertised in the Sunday Times or in the newspaper. Another 21% or so are valued between 300 and 600,000 rand. So that means over half of the properties, residential properties in the country, are less than 600,000 rand. Now they're sitting down at the bottom of the market. So the stock is quite wide at the bottom. And I think that's an important point to make. What we've seen over time in terms of the segmentation, and this won't be a surprise, is that the percentage of properties that are sitting at the high end is growing, both in absolute terms and as a share of the total market. So although we are seeing increases in all the segments, the growth is larger at the top end of the market, so over 1.2 million. And then as you mentioned in your introduction, government subsidized properties, this is the BNG RDP program, the National Housing Program, plays a massive role in the housing market and in the housing stock and in the residential property market. And I think we know this because we hear the minister say that there's been 2 million housing units delivered, but we don't quite realize what the impact is. We count in our research that about 31% of all residential properties in the country were built by government. 31% of all properties. Now that's a huge contribution to the residential property market. So what we're seeing is obviously the number of new houses that are built by government and transferred to beneficiaries varies from year to year, but essentially we're seeing that about 35, 37% every year of new transactions is actually, it's not the new registrations of newly built houses by developers, it's actually government producing houses and handing them over to beneficiaries and giving them the title deed and the registration of the deed's office. So it's a massive impact and I think that's important to understand right from the beginning that there is a large part of the residential property market that's under 600,000 and that the significance of government subsidized housing in that segment is immense. And you know, Alison, I remember when I spoke to one of your colleagues last year and that was one of the key things that they actually had outlined and we don't hear that statistic often. I think if anything we have an impression that we either firstly just don't have such a huge chunk of the residential property market being either priced at that amount, but also be government being such a big contributor. But I don't want us to focus on that aspect a bit. I think I want us to explore then what are some of the, I want to say market activity in that segment because we know that you actually pointed out as you were answering the earlier question that we don't typically see those properties being advertised whether it's on private property or any other platform. And it's because initially they're obviously being transferred by government but is there then other activity post that transfer? Because we know there's X number of years where you can't sell the property but after that period is there any kind of activity that occurs from people who would have initially received your properties from government in particular. Yes there certainly is there's a resale market for government subsidized properties and there's also movement and resale activity just at the lower end of the market of houses that are built in the private sector. Now the supply of new houses at the very end of the market by the private sector is very low. So you see very few houses delivered below 300,000 and very few between 300 and 600,000 that's mostly a place where government is acting as the developer. But once those houses are built there is activity and there's a there's a functioning, there's a residential property market at the bottom there are transactions that are happening. Now the issue I think is around formal versus informal transactions and I've mentioned that that our research is based on the deeds data from the deeds registry so it's only going to pick up on the formal transactions but we are aware that there's lots of informal transactions that happen at the lower end of the property ladder and that's really for a number of reasons. I think one of them has to do with there may be problems with the title deed. So the title deed may not have been transferred into the owner's name and part of an informal sale. There may have been a death in the family and the process of sorting out the estate was not done. So it's still sitting in Makulu's name. There's also situations where the the rates clearance perhaps is not sorted out and so there isn't an ability to trans transact the property on the formal property market. So there's lots of reasons practical reasons why some households will opt to go informally and the platforms for that kind of transaction as I said they're not sitting in the newspapers and they're not with with Pam Golding. What they are is they're often on Facebook, Facebook marketplace, they're on different online platforms and those are transactions that are often happening on a cash basis as well. So we're seeing less involvement by the banks in terms of offering bonds at the lower end of the market but there is activity. You mentioned as well the government subsidized properties and the market there. I think that's an important one to look at. So as you said because of the nature of the housing subsidy program beneficiaries are not supposed to sell within eight years unless they offer that property first back to the province. Now after eight years there is quite a transaction of resale properties and of government subsidized properties being sold. There's opportunity for more of that but it's an important market because those properties are often sold at a price that is cheaper than buying a newly built house. So if I'm a first time home buyer and I'm not able to access a bond or I haven't accessed flisp often the resale market provides more of an opportunity there than going to newly built units. So that's part of the story that's happening at the lower end of the market as well but there's more that we can do to support it and I think that's one of the key areas of intervention. And that's actually part of what I want us to touch on Alison is basically how do we support it but tied to that is how do we confirm the legitimacy of that transaction because in as much as that you know you could generally be facing a seller where the property does in fact belong to them they may have issues with some of the paperwork because we know how these things sometimes go but the reality is we've seen I've seen more transactions being scams than you know those where it's legitimate owners of whether it's an RTP house or you know a very old township house that's being sold often you know certain properties are sold behind family members' backs so not everybody who is meant to consent to the sale of that property is is actually being given an opportunity to consent so a relatively go and sell it off. So what are some of those steps that can be taken because on the one hand we understand that your property as an asset is a very powerful tool that can be even within that market and that they too should be having the opportunity to use that asset and transact with it if they so wish and could perhaps even be an enabler in for a particular family but in the same breath we also know that we are seeing a lot of scams due to the nature of paperwork not looking like what it would typically look like in other segments. Sure yeah I mean the title deed is a really important document and it's important not just for the buyer but also for the seller to protect the sale and and to to formalize that transaction. We have and and my colleague may have mentioned this a year ago when she was here we have a pilot program that we've been running in Cape Town called the Transaction Support Center and it speaks to what you're talking about in terms of how can we support this market and and get it to be functioning in a way that is inclusive to all households. So the Transaction Support Center is intended to facilitate households and people who would like to transact formally but are encountering those kinds of practical obstacles to a formal transaction that makes it it tempting and and frankly rational to revert to an informal transaction. So the Transaction Support Center works on a case-by-case basis to help households access the title deed if it's never been transferred perhaps to get it into the right the right family member's name as you mentioned can help them deal with the rates clearance deal with with trying to access a bond so so working with the banks and approaching them and getting the kind of paperwork that's in order to apply for that financing and then of course there's the the government program FLISP which provides a subsidy to households in the income segment that is higher than those who can qualify for a fully subsidized house and the Transaction Support Center can also help those households if they qualify to apply for that FLISP to support their their purchase. So I think those kinds of local level hands-on case-by-case supports are really important and what we've seen in the learning on the TSC is that it's extraordinarily time consuming and and that I think is the the main challenge to scaling up that kind of intervention is that these are these are cases where there's just complications the the house has been transferred one or two times and formally and all of that has to be unraveled and formalized from the beginning and moved forward and it's time consuming it's complicated and it requires a lot of perseverance and diligence so I think the the cases that the Transaction Support Center has has successfully intervened with are very important but we're we're needing to think about how do we scale up that model to really support this market and I think there are ways and there are other interventions as well besides a pilot like the TSC. I think we're going to leave it there this evening thank you so much for joining us on the show. Thank you and that is Alison Jangana who's the Head of Research and Market Intelligence at the Center for Affordable Housing Finance in Africa wrapping up the Friday edition of the Private Property Podcast with myself Well believe it or not it turns out it's actually not Matashanganga's birthday her birthday was in fact in January I don't know what was happening in the comment section because we wished her a happy birthday as the Facebook page and everybody was wishing a happy birthday but she says listen she's open to having two birthdays a year and she's accepting presents whether it's property or something else so do show her some love on our Facebook page Well that's where we're going to leave it this week it's been such a pleasure to have you with us and I do hope that you're going to have a great weekend I'll be back on your screens on Monday at 7 p.m. Until then hope you stay home and stay safe