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South Africa is sitting on a R3 trillion treasure trove of untapped and \u201coff the books\u201d real estate value embedded in South Africa\u2019s townships and rural areas, potentially reshaping access to finance, insurance and economic growth.<\/p>\n
Identifying and unlocking that hidden property wealth could transform the lives of millions and give a significant boost to the country\u2019s gross domestic product (GDP).<\/p>\n
Why most household wealth remains excluded<\/strong><\/p>\n The developers of a fintech (financial technology) system, which can assign monetary values to properties and land outside the formal property market, point out that while millions of households live in formally registered properties, an estimated 90% of South Africans have built homes incrementally using cash, without payslips, mortgages or access to formal credit.<\/p>\n However, they lament that until this treasure chest of potential equity is unlocked, SA\u2019s real GDP growth could remain stunted at under 1%.<\/p>\n The E-DEED solution and its technology<\/strong><\/p>\n The system, E-DEED, uses artificial intelligence and blockchain technology to generate property valuations with a claimed accuracy rate of 97%, even where homeowners lack formal title deeds.<\/p>\n The platform \u2013 developed by businessman and author Lance Chalwin-Milton, informal economy specialist GG Alcock, and Afrirent executive group chair Senzo Tsabedze \u2013 argues that SA\u2019s property market remains deeply bifurcated.<\/p>\n Listen\/read: According to the E-DEED founders, this has left vast amounts of household wealth excluded from the formal economy, contributing to persistently low GDP growth of under 1%.<\/p>\n Read: Alcock said conventional property systems fail to accommodate the realities of township homes, RDP housing, and properties on tribal or Ingonyama Trust land.<\/p>\n ADVERTISEMENT<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n \u201cMillions of homes will never receive title deeds because of historical, cultural, and administrative complexities. In the absence of title deeds, we need alternative ways for owners to realise the value of assets they have invested in for decades,\u201d he said.<\/p>\n Digital valuation and accessibility<\/strong><\/p>\n E-DEED produces a digital valuation certificate linked to a non-fungible token, intended to serve as a secure, tamper-proof representation of a property\u2019s value.<\/p>\n The system requires only a smartphone, making it accessible to homeowners previously excluded from the property and financial markets.<\/p>\n Chalwin-Milton estimates that SA has around 20 million homes, of which only about nine million are formally deeded.<\/p>\n<\/blockquote>\n \u201cThese so-called \u2018unwealthy\u2019 households often sit on assets worth R1 million to R2 million or more\u2026It is 100% equity that is currently ignored by banks and insurers,\u201d he said.<\/p>\n Lessons from disaster and inequality<\/strong><\/p>\n Chalwin-Milton pointed to disparities exposed by the KwaZulu-Natal floods, where insured properties in affluent areas were rebuilt while uninsured township homes were lost entirely.<\/p>\n He said denying families insurance for assets of equal value is unjust.<\/p>\n<\/blockquote>\n \u201cWe want to make the unwealthy, wealthy. When we say \u2018unwealthy\u2019, that is a misnomer. These assets can be worth R1 to R2 million or more. This is a 100% equity asset. When we did our homework, we encountered an estimated 20 million homes in South Africa. Only 10% \u2013 two million of them \u2013 are classified as \u2018shacks\u2019,\u201d Chalwin-Milton said.<\/p>\n Insurance as an immediate impact<\/strong><\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n He said there are about nine million deeded homes, and the remainder are the invisible but significant structures within townships or on tribal trust land in rural areas.<\/p>\n Read: Who owns the traditional \u2018family home\u2019 in SA?<\/p>\n One immediate impact could be in insurance, Tsabedze said.<\/p>\n Currently, just 11.54% of SA homes are insured and that E-DEED creates an \u201cinsurable interest\u201d, allowing under- and uninsured homeowners to cover properties at their true value.<\/p>\n Expansion plans and a moral imperative<\/strong><\/p>\n \u201cThis is about transparency, efficiency and inclusion,\u201d he said.<\/p>\n The founders believe the platform could transform asset finance and insurance, with plans to expand into at least six other African countries by the end of next year.<\/p>\n<\/blockquote>\n They argue the initiative represents both a commercial opportunity and a moral imperative to recognise long-ignored household wealth.<\/p>\n Read: Tsabedze believes that traditional property wealth processes have been marred by inefficiencies, paperwork, and lack of transparency.<\/p>\n This article was first published\u00a0here.<\/em><\/p>\n Follow Moneyweb\u2019s in-depth finance and business news on WhatsApp here.<\/em><\/p>\n<\/p><\/div>\n
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