Home ownership essential for a stable democracy

Even though millions of the poorest South Africans are dependent on social grants, it is indisputable that the income and living standards of most citizens have improved over the past 19 years.

The open, post-apartheid economy, and the emergence of a sizeable - and generally well-paid - civil service, have paved the way for the emergence of a black middle class.

Even artisans and manual workers benefited from the growth years, thanks in part to powerful unions that were able to secure above-inflation increases for their members.

Some of the gains have been frittered away in the past few years as the economy slowed, the rand faltered and consumers faced a plethora of increased costs - petrol, food, imported goods, rates and taxes, and electricity.

As the banks tightened their mortgage lending criteria in the aftermath of the global credit crunch, fewer South Africans were able to accumulate fixed assets, choosing instead to buy cars and other ''bling'' items.

As we report elsewhere today, new research shows that home loans now represent only 25% of credit granted, compared with 47% five years ago.

Vehicle finance now accounts for a third of credit, and unsecured loans for almost a quarter.

Though the 2011 census showed that 3.5million more households were then living in formal dwellings than in 2001, millions of others, though they do not qualify for state housing, do not earn enough to buy their own homes on mortgage.

We need to find a way to correct this situation in the interest of social stability and the general wellbeing of our economy.

Part of the solution lies in inculcating a belief in the benefits of saving.

But the major banks are going to have to come to the party. They would do well to consider strategies for easing their lending criteria for creditworthy home-buyers.