Fiscally Unsustainable Social Welfare, Untenable Housing Solutions and the Mortgage Default Ratio in South Africa
pdf

Keywords

Finance
Mortgage
Housing
Credit
South Africa

How to Cite

Moss, V. (2013). Fiscally Unsustainable Social Welfare, Untenable Housing Solutions and the Mortgage Default Ratio in South Africa. International Journal of Finance & Banking Studies (2147-4486), 2(4), 45-59. https://doi.org/10.20525/ijfbs.v2i4.162

Abstract

This article reflects on social welfare system and governance of housing markets from an end-user perspective. The article critically
analyses the way in which social welfare has correlated to unsustainable development and created self entitlement behaviours and
attitudes in the South African low income housing market. The phenomenon was demonstrable by empirical research whose
findings confirmed an existence of an association between a fully subsidized social housing model (as underpinned by South Africa’s social welfare) and propensity to default on mortgages. The study found that the risk of default by homeowners in the low income housing market in South Africa is influenced by government’s housing grant model. In other words, the research established that the principle of servicing a mortgaged starter property (that is almost similar to a government free house by both structure and design) is not universally accepted by homeowners of these mortgaged houses. The unintended consequences are that the system has created indefinite expectations that potentially could; (i) erode the country’s balance sheet; (ii) add to non-payment behaviour; (iii) pressurize the economic and credit systems; (iv) propagate entitlement attitudes and mindsets; (v) create social instability and (v) widened the country’s balance of payment deficits.

https://doi.org/10.20525/ijfbs.v2i4.162
pdf

References

Allen, T and Thomas A. (2000) “Poverty and Development into the 21st Century”. Open University Publishers: Oxford

University Press, Oxford, UK. p.23.

Anderson, G.E 1996 Welfare States in Transition: National Adaptations in Global Economies: United Nations

Research Institute for Social Development, UNRISD

De Vos, A.S. Research at Grass Roots: For the Social Sciences and Human Service Professions. Van Schaik

Publishers, Pretoria, South Africa. p.298.

Gleason, D 2013: The Bottom Line: Business Day Newspaper Columnist. Business Day, August, 14, 2013.p10.

Johannesburg.

Gleason, D 2013b: The Bottom Line: Business Day Newspaper Columnist. Business Day, August, 14, 2013.p10.

Johannesburg

Kayamandi Development Services, February (2011) “Report on Economic Impact and Expenditure of Housing

Delivery Programmes from 1994 to 2010”.National Department of Human Settlements (NDHS), Pretoria,

Khan, F. and Thring, P. (2003) Housing Policy and Practice in Post Apartheid South Africa, Heinemann Publishers,

Johannesburg.p.85

Rust, K. (2011) Findings report on the Overview of Housing Finance Systems in South Africa. Centre for Affordable

Housing Finance (CAHF), Johannesburg, p.19

Marshall, T.H. 1950. Cited in Ola Sjoberg. 1999. Paying for social rights. Journal of Social Policy. Available from on

line, accessed 18 November, 2007 http://www journals.cambridge.org

Vick, C. (2011) Zuma‟s Mid-Term Review: Housing. A Lesson not Learned. The Times Newspaper, December,21

, Johannesburg

Moloi, P. (2013) South African Institute of Race Relations (SAIRR). Power FM Interview on Social Welfare

Expenditure and Impact. Johannesburg.

National Treasury, 2013, Statement of the National, 2013 Revenue, Expenditure and Borrowing; March 2013,

Pretoria.

Investec, 2013 Budget update: slower GDP growth expectations widens projected debt and deficit ratios. February

, Johannesburg.

Moneyweb: 2013. Housing Backlog in South Africa www.moneyweb.co.za accessed 13 August 2013, Johannesburg.

National Department of Human Settlements 2013, Minister’s Budget Vote, 2013/2014. National Assembly: Portfolio

Committee on Human Settlements.

Motsuenyane, S. 2011. Sunday Times, 30 October, 2011.

T. Mboweni, 2013: Former South African Reserve Bank Governor, Business Day, 02 July, 2013.

The National Credit Regulator (NCR) Quarterly Report, (2010) National Credit Report, December, 2010. p.9.

Mason, B.J. (1992) Preparation of Soil Sampling Protocol: Sampling Techniques and Strategies. Published by

Environmental Protection Agency (EPA), Washington DC, USA, p.8.

Young, S.G (1997) Statistics Glossary. University of Glasgow: Department of Statistics. Glasgow, United Kingdom.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.