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House Prices and Crime

04 Sep 2007 / by Gina Schoeman


What does crime do to the potential price of a house?

A few weeks ago I was mugged. Granted, we probably shouldn't have been walking to our car two blocks away, but at the same time, there were many people around us, and cars had ground to a standstill in bumper-to-bumper traffic. In hindsight, a cold barrel to the temple is enough to make you cooperate, and also enough to make you consider the spin-offs of crime to our economy. And it was on this note that I began considering the impact of crime on house prices.

We all know the price of a house is largely determined by the number of people that demand to purchase it. When making a choice, an individual is valuing not only the intrinsic particularities of a property (in other words, the type of construction, number of bedrooms, square metres, age of the building, etc.) but also location aspects such as, neighbours, crime statistics, access to shopping areas, schools, distance to work and the environment. Economic theory calls this hedonic pricing. Simple English calls this being smart.

Most property listings in South Africa make mention of the fact that a house has some form of security in order to address any concern about crime. Yes, other factors that affect the price of a house do exist, but with crime being notorious in South Africa, it may be useful taking this into consideration when formulating the price of a house.

Figure 1: Number of burglaries at residential premises

Source: Institute for Security Studies, Macquarie Research, August 2007

One of the most prominent reasons for someone to choose a complex over a free-standing house is that a complex gives the owner a greater sense of security; a guard monitors the traffic flowing in and out of the complex, the entire area is usually surrounded by electric fencing or an 8-foot wall, and the close proximity of neighbours allows peace-of-mind that should something occur, you won't be alone. Although the actual numbers are difficult to prove, most estate agents would be able to confirm that a clear reason for the high number of sectional title sales over the past few years has been a spin-off from the search for greater security (see graph below).

Figure 2: Full title versus sectional title growth

Source: Statistics SA, Macquarie Research, August 2007

As for full-title houses, sales of security mechanisms have soared over the past few years. From electric-fencing to alarm systems, from 24-hour patrol vehicles to burglar bars, this market has grown and grown. There is no doubt that a free-standing house with an 8-foot wall, two dogs, an electric fence and the presence of a patrol vehicle every fifteen minutes is more of a deterrent to a criminal than a house without these additional factors.

Okay, so let us do a quick comparison. After speaking with four estate agents I managed to get to grips with some actual numbers. Take two 3-bedroom houses in Bryanston; House A and House B. Both houses are roughly similar in size, location and amenities (such as bathrooms, swimming pools, etc.). The contrast is that House A has a 6-foot wall and no electric fencing; House B comes with a 10-foot wall and an additional 1-metre high electric fence. Add to this the menacing sound of three rather large canines behind the 10-foot wall of House B and there are no prizes for which house a criminal would choose!

The final price difference? Sizeable.

Although both houses were originally set at a similar price level (approximately R1.6 million), the selling price of each differed quite significantly. The estate agent informed me that House A has been on the market for 2 months; and that many potential buyers would have easily been swayed if the security levels had been higher. Furthermore, the buyer managed to negotiate the price down considerably, basing his reason on having to spend extra on increasing security. On the flip side, House B was sold in a short two weeks and with no significant renegotiation on the price.

Unfortunately, crime levels differ hugely from one suburb to another and so, a national average of how crime affects house prices is not available. But without a doubt, the level of crime in your area will affect the price of your house. It is best to keep an eye on your neighbours as a benchmark of what standard of security is needed.


eNatis busts unroadworthy vehicles
[ Johannesburg, 25 September 2007 ] - Business intelligence tools in the Department of Transport's much-maligned electronic National Traffic Information System (eNatis) have proved effective at rooting out unroadworthy vehicles, says the system's project management team.

“The department was informed that vehicles distributed by a certain local importer had been found to be of substandard quality and had, allegedly, not been inspected to establish their roadworthiness,” says Werner Koekemoer, the department's eNatis project manager.

Due to an administrative oversight on the part of the South African Bureau of Standards (SABS), the vehicles in question, about 400 Chinese-built Asiawing trucks, had not been subjected to roadworthiness testing as is required by law. The trucks were being operated on SA's roads.

Koekemoer says the SABS's Inspectorate of Manufacturers, Builders and Importers is the only authority that can certify a vehicle class roadworthy under the Road Traffic Quality System and approve it as roadworthy on eNatis.

“eNatis provides the department with a highly effective means to ascertain – and enforce – the roadworthiness of vehicles,” says Koekemoer.

“In this instance, we intervened by means of the system to correct an administrative oversight on the part of the SABS, thus ensuring that a substantial number of imported vehicles will soon be undergoing roadworthiness testing. In addition, the functionality built into the system will prevent this situation from recurring in the future.”

He explains that at the heart of controlling the standard of imported vehicles is a process known as “homologation”.

“Homologation, in a nutshell, entails that the Inspectorate of Manufacturers, Builders and Importers establishes that a specific vehicle model complies with the national standards for its type as tested,” he says.

“Once a specific model has been homologated, the SABS links the model to the manufacturer, importer or builder (MIB), which may then introduce new vehicle records of the specific design onto the system. It is the responsibility of the MIB to ensure, through its own quality system, that every vehicle of the design is indeed built to the design the SABS has homologated.

“All the vehicles in question have a gross vehicle mass (GVM) of more than 3 500kg and, according to the relevant legislation, such vehicles must be certified roadworthy before they are allowed to operate on public roads,” says Koekemoer. “The eNatis functionality automatically marks a vehicle design (model) as requiring roadworthiness testing if the GVM exceeds 3 500kg.”

The department has already informed the SABS that the vehicles will be marked on eNatis as requiring roadworthiness testing. It has also provided the SABS with the details of each vehicle's owner and has requested the organisation to contact all of the owners, explaining that their vehicles need to undergo roadworthy testing immediately.


Caught on camera

Facial-recognition technology part of Pellissippi program to train security experts

By ANDREW EDER, edera@knews.com
August 10, 2006

A new camera technology that recognizes individuals by scanning faces and storing the unique profile is part of Pellissippi State Technical Community College's program to train the next generation of security experts.

The facial-recognition technology, from the San Francisco company 3VR Security, has the potential for use in controlling access to buildings and spaces as well as a valuable investigative tool. The system is part of the rapidly expanding biometrics industry where revenue is expected to double within five years.

Students at Pellissippi State can receive training on the camera and software as part of the school's Security Engineering and Administration Technology program.

"The whole profession of security is becoming higher-tech and more professional," said program coordinator John Sterling, who has worked with both Tennessee and North Carolina in the area of homeland security.

The two-year program helps students get a foothold in the burgeoning security industry by educating them in the legal, moral and ethical aspects of security as well as the nuts-and-bolts of asset control, threat planning and crime prevention.

This fall, the SEAT program will launch in full with 14 classes and there are 15 declared SEAT majors, Sterling said.

The program is launching at a time of growth and change for the security industry. Al Garcia, director of operations for Oak Ridge-based Security Consultants Group Inc., said there has been a dramatic increase in demand for security services since the Sept. 11 terrorist attacks.

At the same time, security companies are seeking employees with higher levels of education and experience.

"These systems are becoming more complicated and technically challenging," Garcia said. "It's not just about finding someone who can install systems anymore."

The heavy demand and increased specialization of the security industry mean that students in the program should find a wealth of job opportunities.

"Certainly, we welcome this degree and this curriculum," said Garret Scott, a security engineer with Security Consultants Group. "A formal education is something we need."

Sterling said the SEAT program points students toward careers in areas such as emergency planning, government security, corporate management and human resources. He said the program's multidiscipline approach is influenced by a post-Sept. 11 mind-set.

"Historically in the security industry, the biggest focus was on asset control," Sterling said. "Terrorism was not routinely considered as part of threat planning.

"Since 9/11, we realized that a terrorist looks at our operation through different eyes."

The 3VR facial recognition technology has both preventative and investigative uses. The software measures 80 points on a person's face to create a profile, which is stored with an identification number.

When the camera spots the same individual, the program calls up the profile, creating a log of entry and activity in a building or area.

The technology also can bring up all instances of a profile in the system, cutting down on the time needed to comb through surveillance videos following an incident.

"It's a tremendous investigation tool," Sterling said. "It saves countless hours of an investigator's time."

The technology falls under the category of biometrics, which refers to a person's innate physical characteristics. Other examples of biometrics include fingerprint identification and retinal scanning.

The International Biometric Group, a consulting and integration firm, reported that global biometric revenues are projected to grow from $2.1 billion this year to $5.7 billion in 2010.

Scott, the security engineer, said the use of biometrics is expanding as the technology matures and production costs come down.

"We're right at the point where the transition is going to become exponential," he said.

The federal government is actively pursuing biometric technologies, and skills with facial recognition technology will be valuable as the government looks for ways to identify people without direct contact, Scott said.

Sterling, a former infantry captain and street cop, said the technology holds great promise. But he said the biometric solution must be supplemented with the types of skills the SEAT program provides.

"Technology should never be relied upon as the sole solution to our problems," Sterling said.

Business writer Andrew Eder may be reached at 865-342-6318.



I-Cube provides security and recognition systems in the following industry:



Container Recognition







  Shopping center

  Shopping center

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Cops utilise eNatis

Over budget
[ Johannesburg, 20 September 2007 ] - The South African Police Service was the single biggest user of the electronic National Traffic Information System (eNatis) last month, says the Department of Transport. The police conducted 904 812 interface transactions.

The second biggest bulk user was DaimlerChrysler SA, which registered 87 593 new vehicles, and Volkswagen SA, which entered 72 787 new vehicles into the national records. There are now eight million vehicles of all types registered on eNatis, records show.

A spokesman says the police typically “tagged” vehicles on the system when they were reported stolen and “untagged” them if they were recovered. They also routinely query the ownership or other details of a vehicle's driver as part of their crime prevention and investigation mandate.

eNatis got off to a shaky start in April. By 31 August, it had clocked 12 980 790 transactions, including 65 028 learner licence authorisations, 191 664 driving licence card orders, 90 258 vehicle record introductions, 303 924 vehicle registrations and 848 771 vehicle licensing transactions.

Close to four million of these transactions were performed via interfaces with other computer systems (such as those of the police, vehicle manufacturers, banks and insurance companies). Users of the eNatis application at registering authorities, testing stations and provincial authorities performed 9 023 473 transactions. Concerning the latter group, the most transactions were performed by Johannesburg (706 828), followed by Cape Town (513 575), Pretoria (497 072) and Durban (271 381).

Over budget

Meanwhile, all is said to be on track for next year's handover of eNatis to the Road Traffic Management Corporation (RTMC). The developer, the Tasima Consortium, is still running the system.

Transport department project leader Werner Koekemoer is on record as saying he wants the migration to the RTMC completed by “no later than May 2008”, a year later than originally scheduled.

The RTMC will outsource the system's maintenance. A tender will be issued in due course.

At last count, eNatis has cost taxpayers R408 million, up from R311 million budgeted in 2001 when Tasima won the bid to design, develop and install the system. Its five-year contract was supposed to expire at the end of May, but was extended to allow for a “smooth handover” to the RTMC.

Transport minister Jeff Radebe in May described eNatis as “one of the most advanced traffic management systems in the world”. He said similar systems were found in Europe and in the US, “but none have the sophistication of the eNatis in respect of road transport management capability”.

Tasima groups together two black empowerment firms and Face Technologies, part of troubled state IT company arivia.kom.




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