The evaluation of service delivery in the fast growing black diamond market
The black middle–class market segment also known as the black diamond market segment has shown immense growth in SA. It currently consists of approximately 3 million black middle–class South Africans with a buying power of approximately R200 billion. Despite the immense size and spending power of black diamonds, combined with its rapid growth over the past 15 years and expected future growth, little research has been conducted on this market segment. The rapid market growth of the black diamond market segment has lead to an immense rise in the demand for middle–income houses. This has caused a shortage of middle-income houses, and government and real estate developers have been unable to supply housing in this bracket to meet this ever increasing demand. The study examines this missing middle between supply and demand for the black diamond market in Tlokwe municipal region in order to provide the Tlokwe Municipality, real estate developers, construction companies, town planners, real estate agencies and the Tlokwe Department of Housing with sufficient information to address this challenge in Tlokwe municipal region. The study was conducted by way of a literature review and empirical study. For the empirical study, the information was obtained through two questionnaires. One questionnaire was compiled for black diamond respondents and one for real estate developers and estate agents in the Tlokwe municipal region. The study found that there is a gap between the supply side and demand side of middle-income housing (houses within the R50 000 to R550 000 price range) in the Tlokwe municipal region, and that there is a high demand for such houses. It was also found that there is a tendency for black diamonds to relocate from the townships to the suburbs. The major reasons for this movement were identified as family and the lack of availability of middle–income houses in the townships. It was also found that the black diamond respondents have a tendency to spend their money on bad debt (debt on expenses) instead of good debt (debt on assets), and are inclined to save rather than spend. Furthermore, as evident from the number of respondents with clothing accounts and cellphone contracts, it was confirmed that black diamonds are status driven, as suggested in the literature.