Why 80% of South Africans are priced out of Homeownership

Key Takeaways

• One house exists for every 3.3 families earning under R26,000 a month, leaving millions without access to property.
• Property prices outpace wages for over 70 years, while housing supply lags far behind population growth.
• Systemic failures in policy, land release, and affordability keep homeownership out of reach for most South Africans.

The Harsh Reality: The numbers don’t lie

‍Lightstone’s June 2025 Property Newsletter highlights a stark housing crisis:

• Over 80% of households earn less than R26,000 a month.
• For this segment, only one formal house exists per 3.3 families.
• Since 2000, South Africa’s population has grown by 19.3 million, yet only 1.9 million homes have been added to the market.

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Renier Kriek, Managing Director of Sentinel Homes, warns:
“There’s something deeply wrong if such a vast demand for housing isn’t being met. The system is broken and government has yet to deliver real solutions.”

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Why Homes Remain Out of Reach

‍Beyond the basic supply-demand mismatch, a combination of economic and structural issues continues to shut out aspiring homeowners:

1. National-Level Failures

• Slow economic growth: Stagnant job creation and weak wage growth keep affordability low.
• Policy uncertainty and graft: Mismanagement of state resources robs citizens of housing funds.
• Restrictive labour policies: High labour costs push construction expenses up, making homes unaffordable.
• Skills shortage: Retiring artisans and weak vocational training increase building costs.
• Foreign investment misalignment: Short-term portfolio flows don’t fund long-term infrastructure or housing.

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“We’ve failed to create an economy that builds homes as fast as we grow our population. This is not just a property issue, it’s systemic,” says Kriek.

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2. Property Market Barriers

• Bureaucratic delays: Approvals take years, inflating costs and discouraging development.
• NIMBYism: Community objections clog courts, delaying housing projects.
• High fixed municipal charges: Low-cost housing becomes unaffordable when basic fees rival mortgage payments.
• Small-unit deterrents: Developers avoid affordable homes due to high per-unit costs with low margins.
• Slow release of land: Municipalities drag their feet on making serviced land available.
• Weak lender and landlord protection: Risky, lengthy eviction processes deter financing for affordable housing.

The Way Forward: Fixing the System

‍Kriek insists the solution lies in political will, structural reform, and smarter market design:

• Streamline regulations: Cut red tape and fast-track housing approvals.
• Release land proactively: Municipalities must identify, prepare, and free up development sites in advance.
• Rationalise charges: Ensure municipal rates are progressive and consumption-based to protect low-income owners.
• Reform labour and skills training: Build a workforce capable of supporting a housing-driven economy.
• Incentivise affordable housing: Tax breaks or dedicated land parcels for small-unit developments.
• Protect financing mechanisms: Shorten foreclosure and eviction timelines to safeguard capital flow.

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“The private sector is ready to meet demand,” Kriek concludes. “There’s enough money in the system. Government simply needs to design a market that makes affordable housing viable.”

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Bottom Line

‍The affordability crisis isn’t just a market failure, it’s a system failure. With 80% of South Africans locked out of homeownership, real reform is the only way to unlock supply and give families a fair shot at owning a home.

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