Indian incomes growing fastest, a demand for better homes expected
Indian household head incomes could equal that of whites by 2018 – which has an average monthly income of R30,000. This is according to HomeBid which studied the latest racial group income figures from Stat SA. The numbers reveal that Indian income levels are growing in real terms (after inflation) at an average of 7.4% per year, while white earnings are showing virtually no real growth at all.
Maintaining the current growth rates, the average Indian household head’s income will be equal to the average white household head’s income in three years’ time.
Economist Neville Berkowitz predicts that the higher growth of the Indian community’s share of the South African economy will be reflected increasingly in the housing market as it uses its 7.4% per annum real income growth to move into better homes.
According to FNB’s Estate Agent Survey, which is suburban-dominated, an estimated 11.8% of total buyers in 2014 were from the “Indian/Asian” classification. Whites made up close on 51%.
Interestingly, the same survey reveals that the white community is buying fewer homes. In 2004, white buyers comprised of 57% of the total suburban market, while the Indian market has maintained a steady 12%. Black buyers have increased, making up around 30% of the market last year, compared with 23% in 2004.
The Indian community provides well-educated and skilled employees as well as an increasing number of professionals and successful entrepreneurs, who are all behind this rapid growth in income levels, according to Berkowitz.
The 1.4 million Indians in South Africa make up a mere 2.5% of the total population, but comprise 6% of all students in higher education institutions. Of the 116,000 Indians aged 20 to 24, nearly half are at universities and universities of technology, according to Census 2011 and Stats SA research.
Some 8% of all graduates completing Masters and Doctoral degrees are Indian. Unsurprisingly, Indians spend 15% more on educating their children than whites and 19% more than blacks and coloureds. Nearly 42% of Indian children and young adults are at private educational facilities.
“The global Indian community prizes education highly and its success in India and the diasporas can be traced back to its desire for education for its children, sound family values, observant religious practices, their ability to identify opportunities and solve problems,” says Berkowitz.
Stats SA findings show that the Indian community’s skilled workforce of professionals, managers and technicians has grown from 25% of its population in 1994 to 45.7% in 2014; the White community population’s skilled workforce was 58.5% in 2014.
The stability of employing Indians is shown in their staying with employers for a period of 5,5 years on average compared to whites at 5,75 years, coloureds at four years and blacks at 3,7 years.
The increase in employment in the labour force in South Africa during 2014 was led by the Indian community growing at a rate of 2.7% per annum, followed by blacks at 1.4%, coloureds at 0.8% and the white labour force shrinking by 2.1% per year.