Addressing inequality through property ownership – South Africa is known for its extreme income inequality, which is amongst the highest in the world. There is no doubt that the severe inequality in our country is the cause of the devastating poverty that currently exists and creates havoc in our people’s lives.
As a country, we have made significant progress, but unfortunately, the economic disparities continue to torment us and are the biggest obstacle to the growth of the economy.
It is important to recognise that to overcome inequality we have to allow people their property rights, in doing this we create a sense of security. A sense of security that comes in owning an asset which leads to feelings of self-respect, independence and pride.
As the World Bank puts it, “These assets interact with the market and social opportunities to generate income, a better quality of life and a sense of psychological well-being.”
It is essential therefore to encourage property ownership for the majority of black people in our country to increase their buying power and stimulate economic growth, property ownership gives a feeling of pride and makes one feel valuable to society. It also creates stability in the country which means that it has a positive impact on both the individual and the nation.
For many white people who were fortunate enough to have access to property ownership, they were able to amass generational wealth, and their children have in many cases gone on to become wealthy adults as a result of generation wealth. It is a fact that generational wealth definitely plays a role in enabling family members to follow their dreams.
Property ownership has always played a central part in this equation that allows families to leverage opportunities to create further wealth for themselves and their children. By contrast (historically) black people were not allowed to own property and as a result were not able to cultivate generational wealth to draw from when facing financial disruption. Which is one of the factors contributing towards what many refer to as black tax.
Hernando de Soto Polar is a Peruvian economist known for his work on the informal economy and the importance of business and property rights. He believes that wealthy individuals who don’t realise that it is in their best interest to allow the productive power of the disadvantaged to be brought into the economy, are an obstacle to realising the full impact that property rights can have on those less advantaged. Rampant socioeconomic inequality weakens economies by increasing the burden on taxpayers.
So, it is visibly apparent that by increasing ownership of assets through access to land and property we can easily diminish poverty and inequality and share prosperity, which will be for the betterment of our society and country.
This issue of Transform Real Estate tackles the issue of inequality head-on, and from start to finish we give you valuable information on accumulating wealth through property and how to become involved in the property market, as well as real life stories of women who have come from different backgrounds and changed their lives through buying property