Last updated: February 27, 2019
Topic: ArtDesign
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Housing as a trade good. What does this statement intend? To understand we must foremost specify the footings lodging and trade good. Housing is a edifice or any other type of construction that provides shelter for people to populate in, lodging has besides been defined as a lasting unit with services, hence, an informal colony without services is non considered a lodging unit. A trade good is a physical unit that can be bought or sold as an investing. Therefore, lodging can be seen as a trade good as people can put in it to do money in the hereafter. In urban countries a big per centum of the land usage is zoned for lodging and a batch of people ‘s income is spent on lodging. This money is used to buy, finance, maintain, insure and mend the house over an drawn-out period of clip, this nevertheless has a downside as you may hold the money to buy the belongings but you may non be able to keep it in the long tally. This in bend will diminish the value of the house therefore ensuing in a loss of money.

Considerations when buying

There are many considerations to take into history when buying a belongings a few illustrations are whether to buy or lease, location, immoveable belongings, lastingness, how much to pass determined by your income and the hazards and benefits of traveling. These will be discussed below:

Purchase vs. rent: As a consumer you must first make up one’s mind if you are traveling to buy or lease a belongings, one time this has been decided there are other factors to see such as location and local comfortss.

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Location: Deciding where to populate is an of import factor as you want to travel your household into a safe and unafraid environment, this must be thought approximately extensively as one time you have moved you may non hold the fundss to relocate once more.

Immovable belongings: Once a house has been constructed it is virtually impossible to take as destruction costs are really high, constructing a house from the land up can be seen as an unsure investing and if jobs arise these can be expensive to set. This kind of job can ensue in a loss of money and a hapless investing. When make up one’s minding whether to purchase an bing house versus constructing a new house the cost deductions need to be considered, an bing house may hold legion jobs which will necessitate to be rectified.

Lastingness: Future additions or lessenings in the market can act upon the design and must be taken into consideration when purchasing or edifice a house, you want to keep the value of the house and perchance increase it to do gross revenues in the hereafter a possibility. Zoning is of importance in this class, purchasing a residential base next to a commercial base can diminish the value of your belongings drastically in the hereafter.

Spending vs. Income: Many people will travel off from the urban Centres due to miss of income and the high monetary values in the metropoliss, nevertheless, this is non ever a good investing as this may increase your travel costs due to your distance from comfortss and occupations. As the householder you need to weigh up the pros and cons of life in the metropolis or on the outskirts of the metropolis taking into history your monthly and one-year income.

Hazards and benefits: Traveling places is an expensive exercising so most people will merely travel if there are low hazards and high benefits. The demand to travel may besides outweigh the cost issue greatly, foe illustration if you live in an insecure country the demand to travel your household may be more of import than the sum of money you will hold to pass. Once once more the householder must weigh up the pros and cons.

Demand for lodging

The demand for lodging is ever an issue particularly in the public lodging sector, the demand for lodging is determined by the local comfortss such as stores and schools and where the occupations are. This is normally around the metropolis Centre therefore making a great demand for lodging in and around the metropolis Centre. The vicinity besides plays a great function because if the vicinity has a bad repute no-one will desire to populate at that place and will travel into other vicinities. Public lodging will merely be built if the value exceeds the building costs but as discussed by Hamdi in lodging without houses many public houses remain unlived in because the hapless population can non afford them and the middle-class population does non desire to populate in them. This becomes a job as public lodging has a stigma attached to them that they are merely for the hapless population and many people do non desire to be seen populating in these houses. Another job is public lodging is built off from the metropolis Centre due to their big graduated table developments so they need to be near major transit paths which is non ever possible therefore increasing costs to the householders.

Public lodging besides frequently looks the same from Johannesburg to Cape Town which is unwanted to most people as they to desire to show their individualism and take ownership of their places much like the affluent person who designed their ain places. “ a witting attempt to do new lodging for low and moderate – income households more appealing to occupants and their frequently wary neighbors. ” ( Wright 3:118 ) . What needs to be taken into history is that what is suited for one country is non needfully suited for another country as the clime is different and the demands of the people are different.

The supply of low-cost places in urban countries is a long term job for the authorities and a solution may ne’er be found as the size of the population increases at an dismaying rate each twelvemonth. Another issue fuelling the demand for ‘free ‘ lodging is the unemployment issue, if you do n’t hold a occupation you can non afford lodging. Low income households face the same issue as they need to supply basic demands every bit good as lodging and their low income does non let this. Due to the recession in 2009 many people had to do major picks sing their current state of affairs in footings of lodging, some chose to immigrate and some downgraded with a select few still being able to afford an ascent. The tabular array which follows shows the per centum of people in South Africa who chose to sell and why in 2009:

FNB House Price Index: July 2009

In the Northern Cape the demand for lodging has increased with the population, nevertheless, the figure of houses built has decreased in recent old ages. Harmonizing the the human colonies section in the 2007/8 fiscal twelvemonth 8 686 public houses were built but in the 2008/9 fiscal twelvemonth merely 4 914 public houses were built decreasing by about half. This could be attributed to a deficiency of support on the authoritiess portion or the planetary recession which affected all public sectors. However, in the Kimberley country the Swedish International Development Co-Operation Agency ( Sida ) has been financially back uping the metropolis since 1997 to assist with urban regeneration. Kimberley like many other metropoliss have their just portion of issues when it comes to lodging and these were brought frontward when the regeneration programs were implemented. Lack of H2O was an issue brought frontward as Kimberley is a really dry metropolis and the cost of providing H2O from elsewhere was highly big, services in Kimberley are seen to be expensive and the mean occupant was seen as being unable to afford this. Last the occupants were non satisfied with the thought of low cost lodging as these are little and unwanted, as I discussed antecedently people want to show their individualism and can non make so with a house that mimics everyone else ‘s. These jobs are merely a few of the 1 ‘s found in the Kimberley country. These jobs are non the same as any other metropolis in South Africa and that is why they must be dealt with separately.

Types of lodging in South Africa

In South Africa there are three types of lodging ; Formal, Informal and Traditional.

Formal: Unit of measurements on separate bases including societal and RDP lodging, Flats, Townhouses and bunch places, units in a retirement small town and flats on larger belongingss.

Informal: Hovels on larger belongingss, hovels in an informal colony and trains or collapsible shelters.

Traditional: Traditional huts or constructions which are made from local stuffs.

All of these typologies are apparent in South Africa and as the state moves towards urbanisation the authorities is seeking to make away with informal lodging in favor of formal lodging with respects to societal and RDP lodging. However, as discussed antecedently people do non favor societal and RDP lodging and rather frequently would prefer to remain in the informal colony in which they live and do non desire to travel off from the country. The authorities needs to take this into history and adapt lodging to accommodate their demands, wants and current state of affairss. Traditional lodging is a portion of South African civilization and occurs largely in the rural countries, a hint of what Africa one time was before urbanization and many choose to populate in these absolutely functional places.

Calculation for expected rate of return

The computation that follows is for the Frances Baard District of the Northern Cape of which the major metropolis is Kimberley in the fourth one-fourth of 2009.

Expected rate of return = He – R

H = rate of alteration of house monetary values ( % ) = 3.8 %

R = mortgage involvement rate ( % ) = 10.5 %

He = expected rate of return of house monetary values per twelvemonth

3.8 % – 10.5 % = -6.7 %

Therefore the rate of alteration of house monetary values for 2009 was down by 6.7 % ensuing in a loss and opportunities are if an person had tried to sell their house they would hold had to accept a monetary value below what they paid for the belongings. This is non surprising due to the recession experienced worldwide where money was lost in all sectors.


In decision lodging can beconsidered as a trade good but this is greatly influenced by the householder ‘s state of affairs. If you can afford the place and its upkeep so it is an investing for you but if you can non the house becomes a load on your fundss and in the long tally you lose more money than you spent. It was said there is “ no ‘simple expression ‘ for lodging ” ( Wright 3:117 ) and this needs to be realised so public lodging can be built to the satisfaction of the consumer therefore eliminating otiose resources.