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Crime rates and the property market

16 May 2017 Lightstone

In South Africa’s ever-changing political climate it’s refreshing to hear a little bit of good news every now and then…

South Africa’s recently released crime statistics reveal a drop in residential and non-residential crime in 2016, both in terms of absolute values and as a percentage of our population. Granted, there were some areas where crime increased slightly from 2015 to 2016 – and the differences in the numbers aren’t huge – but for the most part, crime numbers are incontrovertibly down. And that’s good news for residential and commercial property owners.

Safety is a key consideration for anyone looking to buy property. You want to know that your valuables and your nearest-and-dearest will be safe, and not live or work under constant threat of danger. Generally speaking, areas with lower crime rates are far more attractive to property buyers and renters, which means that as a property owner, you can ask more for your property in an area where crime is lower.

National stats and categories

Lightstone receive data from SAPS and we then group the information together to model the statistics down to a more granular level. We classify malicious damage to residential property and home burglary as residential crime, and burglary, shoplifting and robbery at non-residential premises as non-residential crime. We do remove the other SAPS reported crimes that do not fit into either of these categories.

Absolute and relative national crime rates per 100 000 people

The above table shows the total number of crimes (absolute values) and crime rates per hundred thousand people across South Africa in 2015 and 2016. The table splits the crime rates according to the Lightstone and SAPS categorisations. However, no matter which way you work it out, at national level there was a general drop in the absolute number of crimes reported in 2016 compared to 2015.

As always, there are a couple of exceptions to any trend. In this instance, aggravated robbery and contact crime bucked the national downward trend, increasing by five percent and one percent respectively. And when we take population growth into account, i.e. when the same rates are considered per 100 000 people, the only category where we see an increased rate is aggravated robbery, which went up by three percent.

Provincial crime rates

Lightstone can provide statistics on crime rates in residential and commercial areas from national down to suburban level. Here is a snapshot of what’s been happening on the residential crime front in South Africa’s nine provinces:

The graph above shows the annual residential crime rates per province from 2013 to 2016. The rates have been standardised per thousand households to show crime relative to the size of the population. The Western Cape has the highest average residential crime rate per thousand households. While the rate has dropped slightly in the past two years, the crime rate is still much higher than that of the next most crime-ridden province, the Northern Cape.

Gauteng and the Free State showed similar rates per thousand households in 2016.

Limpopo has the lowest provincial crime rate, although it has seen progressive increases over the past four years. This trend does not necessarily mean that the province is bucking the trend, however. It could rather be the result of an increase in access to police stations in the province’s developing rural areas. More police stations mean easier access for residents to report crime, which would show up in the numbers as more incidents.

And into the suburbs

Drilling deeper into suburban stats we get a better understanding of what drives crime and how it impacts the economy at grassroots level.

The pie-chart below shows the distribution of South African suburb classifications as categorised by Lightstone. By far the largest proportion of suburbs (44%) are located within a metropolitan area. Given that these metros are, by definition, major economic hubs, we can reasonably assume that the people who live in these suburbs will be wealthier, on the whole, than those who live in the suburbs of small towns or rural areas. And so it’s safe to say that they own more assets, and assets of greater value – a combination that’s enormously appealing to the criminally inclined!

The graph above shows national average residential crime rates per thousand households, broken down by suburb classification… and it’s not difficult to spot where the crime hotspots are! Metro suburbs have the highest residential crime rates by far, followed respectively by the suburban areas of large and small towns, and then inner-city residential areas.

Security is a major factor for people who are looking to buy property in major metro suburbs. Complexes and estates are perceived to be more secure, which is why “gated living” is so popular – and hence why these properties are so much more expensive.

Vehicle crime hotspots

Private transport still plays a significant role in a large portion of the population’s ability to get to work. In this context, it’s worth highlighting the areas where the highest number of vehicle-related crimes took place in 2016:

Gauteng features prominently on the list of vehicle crime hotspots. In fact, the top three suburbs on the list are located here. Pretoria Central had the highest recorded number of vehicle crime cases, followed by the nearby inner-city suburb of Sunnyside.

The Johannesburg and Durban CBDs also feature prominently on the list.

These numbers give rise to a double-crime-whammy for metro areas. In addition to high residential crime in metro suburbs, high vehicle crime rates in the central business districts have a compounding negative effect for businesses in these areas, as well as the people who work and/or live there – to the extent that the sustainability of economic activity in these areas could potentially be at risk.

Conclusion

Although overall reported crime rates have dropped at national level, the rates are still alarmingly high. Residential crime rates in major metropolitan areas, combined with the concentration of vehicle-related crime rates in the business districts in these areas, is a toxic combination for property prices and could pose a serious threat to sustainable economic activity.

Hopefully the slight improvement in our national crime statistics is the start of a massive uptick. Wouldn’t that be lovely?

Quick Polls

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The shocking crime and motor vehicle accident statistics shared during a recent SHA presentation suggests that group personal accident and personal accident cover are a no-brainer. Do you agree?

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