Struggles with municipal water and sanitation systems are negatively impacting South Africa’s residential property market, Cape {town} Etc reports.
While loadshedding has been suspended for the time being, a number of areas across the nation are experiencing problems in relation to their water supply.
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Water shortages, failing infrastructures and issues related to service delivery are causing buyers and investors to doubt the ‘security of essential services’, as reported by BusinessTech.
Reports have indicated that SA’s three biggest cities, namely Johannesburg, Durban and Cape Town, are dealing with ‘declining water quality and an unreliable supply‘.
Earlier this year, upmarket suburbs in Johannesburg were without water for roughly ten days, and in 2023, the entirety of Johannesburg experienced a water crisis that prompted public outcry and raised concerns about the city’s capacity to ‘provide essential services’.
Water and Sanitation Minister Pemmy Majondina stated that South Africa has ‘seen a drop’ in the quality and reliability of the country’s municipal water and sanitation services.
Due to the R21.3 billion debt from municipalities, water boards are unable to properly maintain and operate infrastructure.
Reliable water and sanitation services are essential in the decision-making process of prospective buyers when they are looking at new properties.
Areas with consistent service see increased demand, while in contrast, interest in properties is dwindling in areas that have inconsistent supply.
Due to these infrastructural challenges, the perception of metropolitan areas as ‘viable places to live and invest’ is slowly eroding.
‘The insecurity surrounding municipal water and sanitation is not just an inconvenience; it is a significant concern that affects property desirability and long-term investment stability,’ said Richard Gray, CEO of Harcourts South Africa.
‘Buyers and investors are now having to critically assess the reliability of these essential services before making any commitments,’ Gray added.
The Water Services Amendment Bill was proposed by the Department of Water and Sanitation in response to these issues and aims to ‘improve the management and delivery’ of water services across municipalities.
Additionally, the proposed Bill aims to enhance the accountability of water service authorities and ‘reinforce mechanisms’ for better service delivery, as well as establishing a localised water service authority, tasked with ensuring that water supply and sanitation services meet the appropriate standards.
The proposed amendments call for community engagement to identify local water needs, as well as greater regulation and oversight.
While this indicates a ‘push to improve service reliability and quality’, there is still uncertainty that remains until these provisions are fully implemented.
This can potentially affect property values in areas with known infrastructure challenges.
Unreliable water supply is also affecting the rental market, as landlords are facing high maintenance costs or property damage due to inadequate sanitation services.
Newer developments that feature alternative water supply systems, such as properties with rainwater harvesting, boreholes and water recycling systems are becoming ‘increasingly appealing’ to buyers.
‘Market analysts predict that areas experiencing consistent water supply and quality will see property values rise, while those struggling with service delivery may face declining market conditions,’ said Harcourts.
‘In the competitive real estate landscape, infrastructure reliability will increasingly influence pricing strategies and investment decisions,’ Harcourts added.
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