Housing Finance in South Africa

Overview

South Africa’s government has been working hard in leading the effort to contain the spread of the Covid-19 virus.  CAHF is grateful to the hardworking essential sector workers, for their tireless efforts to increase the breadth of testing across our communities, to ensure that residents have access to essential services, and that our country and its residents are safe.  For up to date information on their efforts, visit the Online Resources & News Portal.

 

This profile is also available in French here.

To download a pdf version of the full 2021 South Africa country profile, click here.

With an estimated 20% of urban households residing in informal settlements, South Africa continues to face serious challenges with adequate and affordable housing for much of the low-income population, despite decades of comprehensive government subsidised housing delivery. A myriad of factors has led to a housing shortage of approximately 3.7 million, which is estimated to be growing at 178 000 annually. To a large extent housing affordability is affected by social and economic factors such as high poverty and unemployment levels. South Africa’s unemployment rate has reached 34.4%, translating to approximately 7.8 million people without jobs. Migration and urbanisation trends further heighten the housing crisis and put pressure on infrastructure for service delivery in urban areas. Two thirds of South Africa’s population reside in urban centres, and a quarter live in informal settlements. Despite service delivery improving over the years, nationally, 12% of South African households do not have access to piped or tap water,18% have no access to adequate sanitation, and 15% are not connected to main electricity networks.  The main challenge for addressing housing in South Africa is attracting investors to scale affordable housing delivery, while government plays an enabling and regulatory role.

South Africa’s real gross domestic product (GDP) is approximately R5.5 trillion (US$383.3 billion).8 The construction sector, including residential buildings, recorded the largest growth rate at the end of 2020. The economy grew by 1.1% in the first quarter of 2021, and is expected to reach 3% growth in 2021, before slowing to 1.6% in 2022. South Africa’s outlook will be affected by existing structural complexities, including the electricity crisis, joblessness and water shortages. Headline consumer price inflation for 2021 is 4.4% and is projected to fall to 4.2% in 2022, staying within government’s target of 4-6%. At the onset of civil unrest and protests in Kwa Zulu Natal and Gauteng provinces in July 2021, the local currency weakened against the US dollar. Uncertainty around the global recovery from COVID-19 will likely impact the trajectory of emerging market currencies, including the Rand.

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 2021 edition, which has up-to-date profiles for 55 African countries.

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