Citymark National Housing Market Report - June 2021
Valued at R5.96 trillion as of June 2021, South Africa’s 6.7 million residential properties make up 71% of the total value of the residential property market. More than half of residential properties nationwide (53%) were valued at R600 000 or less, while 32% of all residential properties were valued less than R300 000—the majority of which are government-subsidised homes. A key force in the property market and a massive public investment, government-subsidised properties (GSP) comprise 31% of total housing in South Africa. As of end of June 2021, the total value of the existing 2 million GSP makes up 8.9% of South Africa’s residential property market.
With support from the Cities Support Programme of National Treasury, the Citymark project undertakes analysis of South Africa’s residential property markets, with a particular focus on the lower end of the market. Based on deeds data from June 2021, this analysis explores stock and transactions of residential housing, focusing on affordable housing. Due to the impact of COVID and economic lockdowns, the housing construction and real estate market activity fell sharply in 2020 and 2021. This is reflected in the number of new transactions which fell from 56 589 in 2019 to 51 028 in 2020—a drop of 9.8%. Prior to the pandemic, the number of new transactions was already declining, falling 13.5% in 2019. Similarly for the larger resale market, the number of resale transactions fell by 15 000 in 2020, to 146 043.Yet, despite reduced record-low interest rates in 2020, only 88 853 households became homeowners for the first time, compared to 94 157 in 2019, pre-pandemic. The majority of these first-time home buyers/owners access their housing on the resale market.
This analysis also explore the impact of COVID on the mortgage market. There were 4 734 fewer bonds issued in 2020, compared to 2019 before the pandemic—a 4% drop. The total number of outstanding bonds in South Africa dropped by 0.14% in 2020, to 2.275 million, a reduction of 3 293 mortgages on the books compared to 2019. However, at the same time, the total value of outstanding bonds increased by or R38.6 billion, or 3.26%, in 2020.
CAHF’s work in South Africa is supported by:
