Daily Archives: June 16, 2025

Joburg ties property sales to outstanding debt payments

The City of Johannesburg has launched Project Lokisa, a sweeping new initiative aimed at recovering outstanding municipal debt, especially from the city’s largest and most persistent defaulters.

The campaign—named after the Sesotho word “Lokisa”, meaning “to fix” or “sort out” – marks a radical shift in the city’s approach to financial sustainability and revenue collection.

At the core of Project Lokisa is a large-scale disconnection drive focused on households, businesses, and entities that owe significant amounts for electricity, water, and other municipal services. The city will also crack down on illegal utility connections and increase monitoring of the effects of service disconnections.

Malope Ramagaga, the City’s acting group head for Revenue and Shared Services said Project Lokisa will include the implementation of a large-scale disconnection operations across the City targeting mostly worst defaulters, with the intense focus on illegal connections and the constant monitoring of disconnection impact on customers.

Ramagaga stated that Project Lokisa will take a hard line stance against:

-High-consumption electricity and water users with properties valued over R100 million
-Residential properties worth more than R5 million
-Commercial businesses
-Government departments and State-Owned Enterprises (SOEs)

A key part of the reform includes changes to the process of issuing municipal Clearance Certificates – a required document for property sales. Under the new system, the City will ensure that outstanding municipal debts are settled before any property transaction can proceed.

According to Ramagaga, under Project Lokisa, the City will introduce changes with regards to the process of issuing Clearance Certificates when the seller sells their property. This is another intervention to ensure that the City does not lose money owed for municipal services by the seller, when they finally put their property on sale.

“A Clearance Certificate will be provided to the transferring attorney and the customer with a notice of the total amount owing above 90 days. Attorneys will be given notice to sign an Acknowledgment of Debt (AOD), which will authorize direct payment to the City from the sale proceeds.”

This policy is designed to prevent residents and companies from offloading properties while leaving unpaid bills behind—a common loophole the City says it can no longer afford to overlook.

In addition to aggressive debt collection, the City will focus on preventing revenue losses from theft via illegal power and water connections—an issue that has drained city finances for years.

The City of Johannesburg is dealing with mounting service delivery challenges, in part due to billions lost annually in unpaid accounts. With Project Lokisa, officials hope to not only stabilize municipal finances but also send a strong message to habitual defaulters.

The campaign is part of a broader effort to reform revenue systems, plug financial leaks, and ensure that paying customers are no longer subsidizing those who evade their obligations.

No-deposit home loans a warning sign among younger buyers in SA

South Africa’s residential property market is undergoing a generational shift, with individuals under the age of 35 – particularly first-time homebuyers – playing an increasingly dominant role.

This rising demand from younger buyers is pushing up property prices in key metropolitan areas and reshaping home financing trends, according to Standard Bank’s newly released Youth Barometer report.

Drawing on data from over three million clients aged 18 to 35, the report offers a deep dive into the financial behaviours of young South Africans, with a focus on homeownership, debt appetite, and affordability challenges.

The data reveals a significant trend: around 40% of all new home loan enquiries at Standard Bank now come from clients under the age of 35. Between January 2023 and April 2025, 74% of home loan applications were from first-time buyers—rising to an average of 76% since mid-2025.

This surge is not only driving demand but also prompting a shift in how and where younger buyers are entering the market.

This segment is critical for the bank, said a Standard Bank representative. It’s far more effective to grow with a client than to win them over later in life.

The Youth Barometer also sheds light on the financial strategies younger buyers are using to secure property in a high-cost environment. T

he average loan approval for buyers under 35 is R1.2 million, with 70% of these loans granted at loan-to-value (LTV) ratios of 100% or more – indicating little or no deposit. In comparison, older buyers average R1.5 million in loan approvals, with only 45% approved at full LTV.

The trend toward higher LTVs among young buyers reflects both a challenge and a strategy: limited savings for deposits, but a willingness to commit long-term. Three-quarters of young applicants also opt for 20-year loan terms, using longer repayment periods to reduce monthly instalments.

Standard Bank has responded by offering first-time buyers loans of up to 108%, subject to risk assessment—helping cover not just the property price but also the upfront costs such as transfer duties and legal fees.

While young buyers are managing to access the market, they’re doing so with tighter budgets. This is evident in their higher Instalment-to-Income (ITI) ratios, with many spending over 30% of their income on monthly bond repayments. While that demonstrates commitment, it also leaves less room for error in a volatile interest rate environment.

The rise in no-deposit home loans is also a warning sign. It suggests many young South Africans are unable to accumulate savings, and are instead relying more heavily on credit to achieve independence through homeownership.

Many of these buyers are stretching their affordability based on the expectation of higher future earnings, the bank noted. It’s a calculated risk—but one that underscores the importance of financial education and responsible lending.

Apartments and entry-level houses are in particularly high demand, especially in city centres and suburban hubs near major employment nodes. This shift is putting upward pressure on prices in metros like Johannesburg, Cape Town, and Durban, where stock is already constrained.

Standard Bank views this younger demographic as a feeder market for future high-net-worth clients and is shaping its products and services accordingly. The bank says it’s focused on supporting this group not only with credit but also with financial literacy tools to help manage debt and prepare for future expenses.

The under-35 segment is now one of the most dynamic forces in South Africa’s residential property landscape. While affordability remains a challenge, the appetite for homeownership is strong – and growing.

For banks, developers, and policymakers alike, the message is clear: the next generation is ready to buy, and they’re reshaping the market in the process.