JOHANNESBURG - Poor service delivery in an area could hit homeowners twice.
On one end, it's the disruption brought onto their daily life, leaving residents scrambling for backup power or needing to buy water.
On the other end, it's the possible reality that the value of their homes could slowly erode
This is a bleak picture which real estate practitioner TT Mbha painted as he outlined the ripple effect poor service delivery has on the property market.
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His comments come at the back of already exiting issues facing various communities throughout the country from water outages, prolonged power cuts and high crime rates. It could even be crumbling infrastructure from roads riddled with potholes, hijacked buildings and streetlights that are not working.
Mbha said when buyers are looking for a home, they are not just looking at the house.
They are looking at what comes with living in that neighbourhood, including amenities such as schools, hospitals, recreational facilities, sporting facilities and restaurants.
Outside of what is available to them is also where it is situated and how safe it is. But more importantly, service delivery and the efficiency of a municipality to act on the problems at hand.
“Nobody wants to invest in an area that is declining in terms of basic services,” Mbha said.
He said property owners in such cases find themselves in two battles: Having buyers who lack interest in the property or having to settle for a lower price when selling their property.
While some homeowners may try to look at alternatives like boreholes or solar power to protect themselves from unreliable services, Mbha said the “reality of that is not everyone can afford that”.
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And for those who can afford these options, they then find themselves being able to negotiate prices but even so, Mbha said there is still a vacuum gap in the property prices.
This refers once again to the significant decrease in the value of a property from the original agreed price because of the negative information discovered about the area.
“You are definitely going to sell it at a loss. Considering the issues at hand, nobody is going to want to offer you the full asking price, already knowing what the issues are in that area. That's the reality of it all as a property owner.
"If you are supposed to get a million for that property, you'll be lucky even if you get R800,000 because people are now educated about what's happening around them. They'll know that you're selling because there's a crime issue or there's a crisis in terms of service delivery," he explained.
Mbha said that while it would be difficult to quantify the exact loss, one could judge the impact from property sales in the area, which may be ‘going through a decline’.
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Despite this, Mbha does shed a glimmer of hope for homeowners.
This, he said, means the communities reclaiming their neighbourhoods.
“Gone are the days of property owners being bystanders. You need to participate in the working of your area. If you don't do it for your area who must who must do it? You live in the area.
“The only time that you see change is when communities come together and contribute towards fixing the issues. Find a solution to bring in the people to fix it because if you want to wait for the municipality, you are going to wait forever and be frustrated as a community.