Black middle-income housing and asset building in Mangaung, South Africa

Asset-building policies are used worldwide to reduce state welfare commitments. In the Global South, including South Africa, asset-based housing development is thought to help reduce poverty. This study investigated asset building and homeownership in a sample of South Africa’s emerging black middle class. Interviews with 244 black middle-class households in Mangaung revealed asset value creation and heavy dependence on mortgage finance. Levels of mortgage default were low, although households with recently secured mortgages struggled to pay them off. We found little evidence that property-owning is helping these households to move out of poverty. Their ability to afford mortgage loans appeared to be directly related to their own efforts and human capital. Very few had considered downsizing as an option, possibly because ownership of a house has social value, for passing on to the next generation. Asset building was still in its early stages and, because these households had been denied equal opportunities and barred from homeownership by the apartheid regime, very few intergenerational transfers had yet occurred.