Security Estates a Negative Economic Indicator

Overseas visitors are often surprised by the high prevalence of gated communities and secure estates in South African metropolis. These 'enclaves' have become increasingly popular over the past two decades and John Loos, FNB Household and Property Sector Strategist, believes that the "property market's performance and design not only reflects economic policy and performance, but can also influence it. The way we live and work, and therefore the way that property is designed, can also be very useful in measuring economic policy success". 

"We know that the layout of residential property is a key contributor to income wealth and inequality - just take the township areas as an example; these areas were purposely settled far from centres of commerce during the Apartheid era, and residents of these regions are still excluded from business hubs, affluent residential suburb and better schooling and medical services", explains Bruce Swain, MD of Leapfrog Property Group.

According to Loos these enclaves have popped up as a result of 'crime and grime' due to an insufficient level of local government cleaning and maintenance services and relatively low investment in public infrastructure. "While the creation of these areas are understandable they nevertheless serve to restrict access and are a strong indicator of the success, or lack thereof, of the current economic policy as determined by Government", says Swain.

The popularity of gated communities increases

"The 3rd Quarter FNB Estate Agent Survey indicated that around 12% of total home sellers are selling in order to re-locate for safety and security reasons. It's entirely understandable, but over time that becomes a very significant number of people", Loos points out. Both he and Swain are of the opinion that the popularity of these secure enclaves are a strong indicator that the current economic policies are not successful - more and more people strive to live in these areas to escape the crime and grime that's become increasingly prevalent in many communities around South Africa due to mismanagement and lacklustre service provision.

Swain believes that "An indicator of effective economic policy would in fact be the decrease of these gated communities as it would point to better service delivery and improved crime prevention".