Housing Finance in South Africa

Overview

To download a pdf version of the full 2019 South Africa country profile, click here.

Against a backdrop of a sophisticated banking system, South Africa benefits from a well-developed housing finance sector and property market. A majority of the residential property market – 58 percent at the end of 2017 – comprises homes valued at less than R600 000 (US$41 695). Due to government’s massive national housing programme implemented since 1994, about a third of the total residential property market are estimated to have been fully-subsidised by the government.

South Africa also benefits from a world-class cadastral system.  According to the 2019 World Bank Doing Business Report, South Africa is ranked 106th of 190 countries globally in how easy it is to register property, almost unchanged from the 2018 ranking of 107th.  It takes, on average, 23 days to go through the seven procedures required and costs an estimated 7.8 percent of the property value. The registration of title deeds for government-subsidised properties remains a serious challenge which is currently being addressed via a targeted government programme.

Despite well-developed credit markets, access to mortgage finance is largely limited to high income earners and consumer indebtedness continues to be a concern. Housing affordability also remains a critical challenge. In 2019, the cheapest, newly built house was estimated at R436 200. Under prevailing mortgage terms, the house would be affordable to only 20.4% percent of urban households. Low household incomes; poor credit records limiting access to finance; rising building costs; and scarcity of affordable, well-located land for human settlements development are all factors which contribute to the affordability challenge.

Government’s primary means of addressing the housing backlog and the housing affordability challenge has been focused on the supply side, providing houses to low income households as part of a comprehensive subsidised programme in which government is the delivery agent. Government interventions include social rental housing and a finance-linked subsidy targeted at the ‘gap’ market—to date, over 4 million housing opportunities have been delivered since 1994. However the backlog is massive – estimated at between 2.3 million and 3.7 million units – and annual delivery by government is clearly insufficient to meet demand.

Find out more information on the housing finance sector of South Africa, including key stakeholders, important policies and housing affordability:


Each year, CAHF publishes its Housing Finance in Africa Yearbook. The profile above is from the 2019 edition, which has up-to-date profiles for 55 African countries.

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