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.

How to add R1.3 million to your retirement after age 45

The 2024 10X Investments Retirement Reality Report, showed that only 6% of South Africans would have accumulated enough money to retire comfortably.

Many fail to plan formally for retirement or simply don’t bother to monitor their retirement planning throughout their working lives – from the time that they start working and are well into their 20s, 30s and 40s, notes Andre Tuck of 10X Investments.

Many people don’t take this planning and monitoring seriously as their retirement seems so far off that they only live for the moment and never set crucial retirement goals.

“In our experience, if one wants to retire at 63, you’ll need to have accumulated savings of at least R7.5 million when you reach that age.

“However, that’s only the starting point – even if you manage to accumulate that amount, you still need to adhere to certain principles.”

The financial services firm recently conducted some basic arithmetic to highlight the potential impact of small changes in one’s retirement journey that can make a big difference come tools down for good.

These examples are for illustrative purposes only; performance is assumed to be constant, and we’re assuming 1% in total fees, which is possible.

Example 1:

You’re 45, and you’ve saved R500 000.
You contribute R7 500 per month to that amount for the next 20 years and get a 5.5% return above inflation.
You’ll end up with around R3.8 million in today’s money by age 65.

Example 2:

You’re 45, and you’ve saved R500 000.
You increase your contributions from R7 500 to R10 000 per month as you reach 50 years and older. When you reach 60, you increase your contributions to R12 500 per month.
Now, at the age of 65, you have approximately R5.1 million in today’s money in retirement savings.

By simply making those seemingly small changes in your contribution amount can potentially significantly increase your retirement savings, and therefore the income you can draw from those savings, it said.

10X looked at other small changes one might consider at key points in your life leading up to retirement.

Age 45: Building your foundation

In the examples above, it used some figures to illustrate how saving a little more each month as you get older, can contribute to your nest egg. However, what else could you do, and what do you need to know?

-You could review your investment fees, as a seemingly small difference of 0.5% in fees could mean 10% more retirement savings over 20 years.
-You could increase your retirement contributions to the maximum allowed 27.5% of income to take advantage of greater compound interest and the associated tax benefits.
-Understand that via the new two-pot retirement system, you’ll have some access to those funds, which might help put your mind at ease about increasing contributions.
-You could consider prioritising bond repayments, which could potentially save you hundreds of thousands of rands in interest in the years leading up to retirement and to give you peace of mind regarding reduced debt.
-You might get into the habit of reviewing the asset allocation in the funds in which your savings are invested. At 45, you can still consider significant equity exposure, as there is likely enough time to recover from any potential market volatility.

Age 55: Strategic refinement of retirement plans

By age 55, if you haven’t started increasing your contributions towards your retirement savings, you’ll shortly be running out of time to get the most from compound interest on those savings.

The longer you are in the market, and the greater your saved funds, the more the force of compound interest can work for you.

Apart from increasing your contributions, 10X said that now is a good time to consider developing supplementary or part-time income streams, especially for the first few years of retirement.

“How might you rent out a flatlet or space in your house? What kind of work could you do part-time, and for whom could you do it? Understanding your options, means you can start planning for those outcomes and building skills for post-retirement income possibilities.”

-You could stress-test retirement scenarios and calculate how your contributions and pre-retirement activities might affect your income.

Understanding how much capital is needed for the desired monthly income and knowing the sustainability of your savings at various income drawdown rates might empower you to change course.

Age 65: Retirement action plan

One of the most important decisions you’ll have to make is getting your pension product, or mix thereof, correct, said 10X. So, understanding the differences between a living annuity and a life (guaranteed) annuity is key.

What else should you think about?

-Look at the fees you pay on your retirement investments. It’s the biggest cost for some retirees.
-Understand how different asset allocations might affect your nest egg in the years following retirement. The last thing you need is to feel stressed about investment performance!
-You can look into creating a withdrawal strategy that maximises tax efficiency.
-You’ll probably want to think about optimising your expenses – does it really make sense to have two cars, for example?
-Could you downsize your house to potentially free up capital and reduce expenses such as house and garden maintenance?

Ramaphosa talks up more policy and regulation as a catalyst for jobs

President Cyril Ramaphosa has called on African countries to seize the opportunity presented by green hydrogen as a catalyst for industrial transformation, energy security, and inclusive economic growth across the continent.

Delivering the keynote address at the inaugural Africa Green Hydrogen Summit at the Century City Conference Centre in Cape Town on Thursday, president Ramaphosa positioned the continent as a key player in the emerging global green hydrogen economy.

“Our beloved continent Africa, the cradle of humanity, is uniquely positioned to become a major player in green hydrogen because it has abundant renewable resources manifested in high solar irradiance, strong winds and hydropower potential.

“The vast land our continent has lends itself to large-scale renewable energy projects. We are therefore perfectly placed to leverage the global shift towards cleaner energy sources for our collective advantage,” the president said.

President Ramaphosa noted that over 52 large-scale projects have been announced across the continent, including South Africa’s Coega Green Ammonia project, the AMAN project in Mauritania and Project Nour in Morocco.

The target, as articulated through the Africa Green Hydrogen Alliance (AGHA), is to produce 30 to 60 million tons of green hydrogen annually by 2050.

It is estimated that this could create between two and four million new jobs in alliance member states by 2050.

“To make use of these opportunities, we need to establish appropriate policy and regulatory environments. We must continue to move as a continent to develop regional certification schemes, hydrogen corridors and green product export platforms.

The president acknowledged the critical need for regulatory certainty, robust certification systems, and market access, stressing that investment and offtake agreements would be key to unlocking Africa’s green hydrogen future.

“We cannot close that gap with potential alone. We must match it with demand signals, regulatory certainty and project preparation support. We need to ensure that there is sufficient and growing demand. This includes building domestic demand in African countries,” the president said.

In this regard, the president noted that the launch of green hydrogen production for mobility in Sasolburg and policy enablers for domestic offtake are important foundational steps.

“As we explore these exciting opportunities, we must work to address the impediments to the growth of this industry,” he said.

President Ramaphosa also highlighted Germany’s continued support through the H2Global mechanism, which has allocated one of its bidding windows to Africa and praised ongoing bilateral cooperation with the EU on green hydrogen projects, including Sasol’s HySHiFT sustainable aviation fuel initiative.

The H2Global mechanism is opening its second bidding window, with one of the four lots allocated to Africa.

“The African lot, which is funded by the German government, will guarantee offtake for successful projects on the continent.

“A Joint Declaration of Intent with the German government focuses on market access, offtake opportunities and value-additive benefits in the production of green steel and green fertiliser. We commend the German government for its commitment to African supply,” the president said.

At home, South Africa has invested R1.49 billion in its Hydrogen South Africa programme, launched new wheeling regulations, and initiated pilot projects, such as green hydrogen mobility in Sasolburg, and advanced planning for the Coega project.

In addition, the South African Renewable Energy Masterplan has been launched to integrate renewable energy and hydrogen into broader industrial development goals.

President Ramaphosa acknowledged the many challenges facing the sector, including high capital costs, global investment gaps, and stiff competition from fossil fuels but urged unity and urgency in building an African-led hydrogen economy.

“Tempered by these realities, this summit must not only be a platform of ideas. It must be a platform of commitments. We must put the African voice at the centre of global energy rulemaking. We must be authors of our own future,” he said.

Investors jump on emerging property trend in Cape Town

Cape Town has become a global hotspot for remote workers, driven by the post-pandemic shift toward flexible work. Long admired for its striking landscapes, vibrant culture, and unique mix of city and nature, it is now a preferred base for digital nomads worldwide.

With fast internet, a growing network of coworking hubs, and comparatively affordable living costs, Cape Town checks many boxes for location-independent workers.

The real estate sector is responding quickly. Industry experts note rising demand in the Western Cape for adaptable properties that support multi-generational living and generate income through short-term rentals. For many, property has become a side hustle – an additional revenue stream layered over their primary job.

This shift is particularly visible in the growing popularity of medium-term rentals—leases ranging from one to six months—which are disrupting traditional norms in both leasing and hospitality.

Cities like Cape Town and San Francisco are leading the way, offering the perfect hybrid of stability and flexibility for both tenants and investors.

“Remote work and the demand for flexible living across the world is driving the rise of medium-term rentals,” said St John Gardner, commercial director and co-founder of Neighbourgood, a Cape Town-based hybrid hospitality firm.

The company renovates and operates co-living and co-working spaces, sharing investment value with co-owners of each property.

According to Global Citizen Solutions, the number of remote workers grew from 10.9 million in 2020 to 35 million in 2024 – a 224% increase.

A Skyscanner report projects that by 2030, 60 million people will work remotely from anywhere, while the World Economic Forum estimates over 90 million remote-capable jobs by then.

For investors, this shift offers strategic advantages. Gardner believes that the space between short- and long-term leases is where the biggest opportunity now lies. As remote work grows and accommodation preferences shift, property owners are increasingly drawn to the middle ground.

One key advantage is flexibility. Medium-term rentals avoid the rigidity of year-long leases while offering more stability than high-churn short-term stays. This appeals to a growing pool of remote workers, professionals, and expatriates seeking temporary, high-quality living arrangements.

“Cape Town and San Francisco are two specific cities where the demand for flexible housing options tends to fluctuate with seasonal and economic trends,” said Gardner. Medium-term rentals allow landlords to adjust rates more frequently, optimising income and aligning with demand throughout the year.

Financially, the model is compelling. While short-term rentals can be profitable, they often come with high turnover costs and property wear. Medium-term leases reduce these burdens, providing more consistent income and lower vacancy rates.

In Cape Town, where seasonal tourism intersects with a mobile workforce, these rentals are especially effective. Landlords enjoy strong occupancy and better returns compared to conventional long-term rentals. San Francisco shows similar trends, driven by a tech-fueled, transient workforce that values flexible housing options.

Gardner highlights the investor benefits:

-Premium pricing with reduced turnover costs
-Higher occupancy rates—85–90% vs. 65–75% for short-term rentals
-Lower vacancy and maintenance expenses
-Rising demand from remote workers, business travellers, and expats in key global cities

“For property investors looking for a profitable, low-risk and hassle-free income stream, medium-term rentals present a very compelling investment strategy for 2025 and into the future as the trend towards flexibility is not showing any signs of diminishing,” said Gardner.

Landlords cash in on strong start to South Africa’s rental market in 2025

South Africa’s residential rental market began 2025 with its strongest performance for many years, according to the latest PayProp Rental Index.

National rental growth reached an average of 5.6% in Q1 2025 – the most robust quarterly increase since Q3 2017 – pushing the average rent to R9,132.

Growth peaked in February 2025, with a year-on-year increase of 6%.

This increase came against a backdrop of a favourable inflation environment. Consumer price index (CPI) inflation fell from 3.2% in January and February to 2.7% in March, widening the gap between rental growth and inflation.

The real-terms rental gain – 2.8% in both February and March – was the most substantial margin seen in the current growth cycle.

Notably, Q1 2025 broke from seasonal norms. Unlike previous years, the quarter did not see a spike in rental arrears.

Instead, the percentage of tenants in arrears edged down to 17%, matching the record low first reported by PayProp in Q4 2023.

Performance diverged widely by province. Limpopo remained a standout, recording a 10.9% increase in rents, just shy of its Q4 2024 growth. The province’s average rent climbed to R8 899, further extending its lead over Mpumalanga.

The Free State also staged a strong comeback, more than doubling its Q4 2024 growth rate to reach 7.6%, lifting its average rent to R7,453 and overtaking the Eastern Cape in the rankings.

In contrast, some provinces lagged behind. Gauteng’s growth dropped to 2.9%, its weakest showing in over a year, raising concerns about whether it can retain third place for average rent, now at R9,201.

Mpumalanga avoided outright contraction but posted the lowest growth in the country at 1.1%, after ending 2024 at just 0.2%. Rents in the province rose by a modest R91 year-on-year, continuing its pattern of underperformance.

The Western Cape still commands the highest average rent in South Africa with an average price of R11,285, although rental growth has slipped slightly to 9.6% from Q4 2024’s double-digit pace.

KwaZulu-Natal posted below-average growth of 4.5%, but with an average rent now just R31 behind Gauteng, a potential reshuffling in the national rankings may be on the horizon.

In other regions, Northern Cape rents rose 3.3%, showing early signs of recovery after a slow 2024. The Eastern Cape experienced a slight rebound to 4.4%, but not enough to avoid slipping to the second-lowest average rent in the country.

According to PayProp’s latest State of the Rental Industry report, nearly 80% of rental agents say affordability concerns are prompting tenant relocations.

For now, the average rent-to-income ratio stands at 28.8%, below the commonly advised ceiling of 30%. However, landlords of high-end properties may need to reconsider pricing strategies to maintain tenant interest and avoid narrowing their potential tenant pool.

New report ranks Joburg among top global emerging data centre markets

Global data centre markets are seeing surging demand due to relentless growth and expansion of cloud computing and AI workloads according to a new report.

The Cushman & Wakefield 2025 Global Data Centre Market Comparison report ranks Johannesburg as the continent’s leading data centre market and places it in the top 10 emerging markets globally.

The report, which benchmarks 97 global markets across 20 strategic criteria from power availability and land pricing to fibre connectivity and regulatory stability, highlights Johannesburg’s maturity and momentum.

Nairobi and Lagos also earned distinction as rising contenders with notable strengths in renewable energy integration and climate resilience.

“While cloud data centres have a well-defined tried-and-tested model and demand remains strong, there’s a growing realisation that AI data centres differ significantly in design, demanding far more power and cooling capacity,” said Calvin Crick, director of Cushman & Wakefield | BROLL Transaction Services.

“The ideal scale of these facilities is still being bedded down, and with development timelines stretching up to four years, global players are being more cautious in their investments.”

In the broader context, Africa is still considered a nascent region for large-scale data centre growth, but its relevance is increasing.

While South Africa clearly leads the continent, Cushman & Wakefield | BROLL is also seeing increased activity in other regional hubs. Nairobi offers a sustainability edge and Lagos presents latent potential.

Favourable macro trends for these African cities include power pipeline diversification, regulatory openness and land availability with lower acquisition costs compared to North America and Europe.

Locally, existing colocation providers, which rent space within their data centres for other companies to house servers and computing equipment, have moved swiftly to expand capacity, particularly in Johannesburg’s East Rand and Samrand nodes.

These areas have become preferred destinations due to their access to power and absence of key locational risks specific to data centres.

Angus Murray, of Cushman & Wakefield | BROLL Transaction Services, said: “The colocation market in South Africa has grown steadily, with ample space now available for hyperscalers to lease without the need for greenfield development. We expect it to take time for that capacity to be fully absorbed.”

“Interestingly, in Cape Town, which is South Africa’s second significant data centre market, we’re seeing land banking activity, which is a sign that shrewd data centre players are positioning for the future and securing sector-specific prime locations for tomorrow’s demand and dynamics now,” Murray said.

Both experts stress that data centre site selection is governed by power availability rather than location alone.

Crick said: “It’s not about finding premium land, it’s about finding power-connected land that meets a matrix of data centre-specific criteria, which includes low flood risk, minimal surrounding residential exposure, multiple access points, fibre connectivity and proximity to major electrical substations. Power delivery costs often exceed land values. The greater the distance from a major substation, the greater the costs. So, it’s important to understand all the nuances when establishing the viability of each potential data centre site.”

Johannesburg stands out as Africa’s most mature data centre hub. It is the only African city included in the report’s emerging markets rankings top 10, coming in at number 10 globally, which underscores its growing relevance as a digital infrastructure gateway into sub-Saharan Africa.

Key indicators driving Johannesburg’s inclusion include its preleased capacity, with over 50% of its pipeline already committed, suggesting healthy demand from hyperscalers and regional enterprises.

It is also one of the few African markets with ≥20MW of power availability in a single facility, placing it on par with major international markets such as Warsaw and Chicago.

The city has a track record of resilience demonstrating strategic planning, ranking among cities that have successfully built data centres outside high-risk flood zones.

John McWilliams, Head of Data Center Insights, Cushman & Wakefield, said: “The industry experienced rapid expansion throughout the past year, a trend we expect to continue into 2025 and 2026. Artificial intelligence (AI) and machine learning (ML), which gained prominence in 2022, are key drivers of this demand now and into the future.”

Global Key Trends

Land Demand and Suburban Shift: Larger site acquisitions for phased campus developments are becoming the norm, pushing data centre projects away from urban cores and into suburban and rural areas. Virginia, Phoenix, and Sydney rank among the top markets for land availability, as developers prioritize locations that support scalability and power integration.
Record Pipeline Growth: The Americas lead in planned data centre capacity, with Virginia boasting a staggering 15.4GW in its development pipeline. Land values remain a top consideration in mature markets, driving greater attention to more cost-effective emerging locations.
Powered Land Becomes Gold Standard: Land with pre-secured utility commitments is in high demand, with developers and even non-traditional buyers like electric vehicle and chip manufacturers competing for sites. These parcels offer a guaranteed path to power amid rising power constraints and long utility lead times.
Investment Surges Across Real Estate Spectrum: The sector continues to attract significant institutional investment, with a sharp rise in joint ventures, mergers, and acquisition activity across colocation, hyperscale, and infrastructure outfits. Recently capitalized firms are increasingly targeting both established and emerging markets, fuelling rapid pipeline growth and positioning data centers as one of the fastest-growing real estate asset classes globally.
Land Pricing and Competition Intensify: While the Americas enjoy lower land costs overall, increased competition in top-tier markets has driven pricing upward.

Click here to download the full report.

How student accommodation is driving property development in SA

With South Africa facing a critical shortage in student housing, the need for innovative property development has never been more urgent. Beyond meeting demand, student accommodation is unlocking new opportunities—for investors, developers, and the youth.

From job creation to urban regeneration and skills development, this growing sector is proving to be a powerful engine for economic inclusion.

Despite global unemployment reaching a historic low of 4.9% in early 2025, youth unemployment remains a troubling global issue.

According to the International Labour Organisation (ILO), around 12% of young people aged 15 to 24 – nearly 65 million individuals – are unemployed, with women disproportionately affected.

In South Africa, the challenge is even more severe. The latest Quarterly Labour Force Survey by Statistics South Africa reports a youth unemployment rate of 46.1% in Q1 2025. For those aged 15–24, the figure climbs to 62.4%, while individuals aged 25–34 face a 40.4% rate.

These statistics reflect an economic crisis, and deeper social emergency that touches nearly every facet of young people’s lives.

The Gauteng Partnership Fund (GPF) says it is helping to alleviate some of these systemic challenges by investing in student accommodation and rental housing. The fund is designed to support entities that provide affordable, well-managed housing solutions, opening doors for youth participation in the property development sector.

With South Africa’s population now exceeding 63 million – and Gauteng alone accounting for nearly 16 million residents – demand for flexible and affordable urban housing continues to rise.

The GPF said it has responded by facilitating the development of over 20,000 homes across Johannesburg and Tshwane, contributing to the creation of approximately 130,000 job opportunities, thereby bolstering both the housing market and the broader economy.

Key student accommodation projects include:

-57 on Bok and Residence Viera in Johannesburg, delivering 378 beds near the University of Johannesburg and Wits University.
-Haborona Student Rez in Pretoria Gardens, offering 308 beds close to Tshwane University of Technology.
-Winchester Heights in Winchester Hills, adding 224 beds for students from the University of Johannesburg’s Soweto campus.

The GPF said its funding initiatives have already opened doors for developers – including historically disadvantaged individuals – to contribute meaningfully to the housing sector.

“While the goal of achieving a decreased number in youth unemployment may seem aspirational, it is certainly one that we should be striving for daily- If we work together, towards a common objective, to see such an outcome achieved,” it said.

In South Africa, the demand for student housing continues to outpace supply, creating major challenges for higher education institutions and the students they serve.

In his State of the Nation Address, President Cyril Ramaphosa highlighted the government’s efforts to address infrastructure gaps:

“Through the Infrastructure Fund, 12 blended finance projects worth nearly R38 billion have been approved in the last year. These are projects in water and sanitation, student accommodation, transport, health and energy.”

According to the International Finance Corporation, a member of the World Bank Group, the shortfall in student accommodation is expected to reach 780,000 beds by 2025.

This growing deficit underscores the critical need for investment in housing near universities and educational institutions—an opportunity increasingly attractive to investors seeking reliable yields and long-term capital growth.

The Department of Higher Education and Training (DHET), in collaboration with the National Student Financial Aid Scheme (NSFAS), is working to close the gap through partnerships with private developers and by expanding its own infrastructure initiatives.

The Development Bank of Southern Africa (DBSA), a key development finance institution, is playing an active role in helping the sector expand bed capacity.

“The department has a student housing infrastructure programme that seeks to build 300,000 beds by 2032. The programme is managed by the Development Bank of Southern Africa. It is currently in phase two of implementation. This intervention will address the supply-demand imbalances,” said Dr Marcia Socikwa, the Deputy Director-General for Universities at DHET.

Private sector involvement is also accelerating. Growthpoint Properties, South Africa’s leading REIT, has established Growthpoint Student Accommodation REIT, a dedicated vehicle for student housing investments.

The REIT had injected R1.5 billion into the sector by 2024, a mere two years after its launch, adding 4,000 new student beds and building a strong pipeline for future projects. By 2024, its portfolio was valued at R3.5 billion, spanning 12 residences with 9,000 beds across Cape Town, Johannesburg, and Pretoria. Growthpoint expected to expand its offering to 10,400 beds for the 2025 academic year, including sites in KZN.

As the student population continues to grow, bridging the accommodation gap is essential – not only to support academic success but to stimulate economic activity and urban development around learning institutions.

South Africa jobless rate overstated, says Capitec boss

Capitec chief executive officer, Gerrie Fourie has questioned South Africa’s official unemployment figures, suggesting the rate could be significantly lower when the country’s vast informal sector is taken into account, as reported by Business Day.

According to the latest data from Stats SA, South Africa’s unemployment rate rose to 32.9%, but Fourie argues this figure is misleading.

“What is interesting is when you look at the unemployment rate, we talk about 32%. But Stats SA doesn’t count self-employed people. I really think that is an area we must correct. The unemployment rate is probably actually 10%. Just go look at the number of people in the township informal market, who are selling all sorts of stuff, who have a turnover of R1,000 a day,” Fourie said.

Fourie, who is preparing to retire from South Africa’s largest bank by customer base—with over 24 million clients – in July, believes the informal economy plays a far greater role in employment and economic activity than the data reflects.

“To grow SA, we need to understand what is happening there [in the emerging market]. If we really had a 32% unemployment rate, we would have had unrest. If you go to the townships, most people have back-rooms to rent out, everyone is doing something. If we are talking job creation, let’s go out and encourage these entrepreneurs.”

Fourie criticized Stats SA for overlooking this “emerging market,” describing the entrepreneurs within it as “discouraged” job seekers. He added that Capitec sees this under-recognized sector as a “growth unicorn” and is working to extend its retail banking success into business banking by serving these informal operators.

Capitec estimates that South Africa has around 3 million formal SMMEs and an additional 3 million “emerging” businesses operating informally. The bank sees a major opportunity in serving the informal SME segment.

Speaking at an event in Stellenbosch in late 2024, Francois Viviers, Capitec’s executive for marketing and communications, highlighted the potential of this underserved market.

“We think there is double that in the informal sector, and we have seen in our research that there are people who are operating in township areas who provide fresh food to the market or provide transport, own a couple of hair salons or run a Tshisanyama, that have high turnover all of it cash and they are not included in the formal banking space.”

“We believe if you can include them by enabling their digital payments, creating visibility of their turnover, then that creates a possibility for us to provide funding that they can use to grow their business. That is where we see an opportunity.”

South Africa’s small, medium and micro enterprises (SMMEs) are already major economic contributors, accounting for approximately 34% of GDP and employing around 60% of the workforce, according to the Banking Association of South Africa.

However, FinScope’s MSME 2024 survey reports that 72% of these businesses operate informally and rely primarily on cash transactions. The sector’s total estimated turnover stands at R5.29 trillion.

At Capitec’s recent annual financial results presentation, Fourie reiterated the bank’s commitment to tapping into this sector. “There’s about 3 million spaza shops out there, 70% of them in the informal market. How do we capture that market and actually unlock the potential in South Africa?”

“We see growth potential in the informal economy in South Africa. There is a need for credit, insurance, VAS, payment channels, education and support that has not previously been addressed. We will work towards meeting this need. We have a large branch network in the right strategic locations, and we will leverage this,” said Fourie.

South Africa’s informal sector plays a crucial yet often overlooked role in the country’s economy, providing jobs and incomes for millions who struggle to find opportunities in the formal labour market.

According to a Quarterly Labour Force Survey (QLFS) released by Statistics South Africa (Stats SA), informal sector employment accounted for 19.5% of total employment in the fourth quarter of 2024.

StatsSA conducted a Survey of Employers and Self-Employed (SESE) in 2023. The Survey collects information on businesses not registered for value added tax (VAT). These businesses are referred to as businesses in the informal sector.

Despite economic uncertainties, the informal economy has shown resilience, with 1.9 million South Africans running non-VAT registered businesses in 2023, up from 1.5 million a decade earlier.

Tourism game-changer on KZN’s North Coast

Set along the scenic North Coast of KwaZulu-Natal, Club Med SA is set to become South Africa’s largest resort development after Sun City.

Once complete, it is expected to serve as a major catalyst for economic growth in the region, drawing international tourists and creating thousands of jobs.

The project is being backed by the Industrial Development Corporation (IDC), the biggest development finance institution in Sub-Saharan Africa. It’s one of the IDC’s largest tourism undertakings to date, adding to its current tourism exposure of about R3 billion.

The Club Med SA development will result in the creation of an economic hub with a high development impact in an underdeveloped node. An estimated 2,000 jobs will be created through the project — with further creation of downstream jobs across the value chain of linked services.

Even French airliner Air France is exploring adding a new route to Durban, thanks to the resort project.

Kagisho Bapela, head of the Services Strategic Business Unit (SBU) at the IDC, said: “The direct impact is 2,000 jobs on construction and permanent employees. A further 1,500 indirect jobs are expected to be created.”

He stressed that the resort’s economic influence extends well beyond direct employment, with a wide range of industries expected to benefit. From food and furniture to linens and other essential amenities, the project will stimulate growth across the entire supply chain.

“If you think about it long-term, there is going to be a marked shift in the KZN economy. We are impressed by the recruitment and training of 110 staff members for kitchen and restaurant roles through the NukaKamma Hospitality School, an NGO dedicated to educating young and unqualified individuals from Ballito townships,” said Bapela.

“The local crime stats for the villages surrounding the construction site are already reflecting a 60% decrease in reported cases compared to this time last year. This tells us that the people are already meaningfully engaged, and the jobs are creating a sense of ownership.”

Construction on Club Med SA began in March 2024. The resort has been designed to achieve Level 4 Green Building Certification incorporating features that improve energy efficiency, air quality, and occupant wellbeing.

Nestled on the shores of the Indian Ocean in Tinley Manor, it includes 345 hotel rooms being built by 17 main contractors with 250 subcontractor packages, and 1,400 personnel onsite daily – 90 offsite project staff.

Key features of the property include a beach club, a resort centre, children’s club and villa suites. It also boasts a 500-seat convention centre, marking Club Med’s entry into the local business tourism market.

And not to be missed will be the accompanying safari lodge in Mpilo Game Reserve — a private Big Five reserve located in northern KwaZulu-Natal that covers more than 8,623ha — offering a magical safari and beach experience suitable for families.

Ken Ogwang, senior dealmaker in the IDC’s Services SBU, said they chose to work with Club Med SA because of its global footprint in the hospitality business.

Club Med, founded in 1950, is a family-centric travel and tourism operator and is believed to have pioneered the all-inclusive holiday experience. It operates 70 resorts in 32 countries including Indonesia, Thailand, Maldives, Seychelles, Mauritius, Turkey, France, Portugal, Italy, Greece and Portugal.

“The other aspect you get from using an international operator is that you get their brand. If someone is sitting in Jamaica or New York, they know what Club Med is in the global tourism landscape,” he said.

The resort site spans two hills with planned access roads. “We are under very tight deadlines with Club Med global for delivery. If you imagine 1,000 foreign guests on opening day, we can’t very well send them packing back to Europe because the resort is not ready,” said Chris du Toit, the resort’s project lead.

Bulk services including roads, a dam, water infrastructure and a permanent electrical supply are soon to be completed.

According to Olivier Perillat-Piratoine, Club Med SA CEO, the construction of the resort is more than halfway complete. “The construction is doing fantastic. The roofing is completely finished for all the buildings, a sign of good progress. We are launching the reservation in October for the opening in July next year.”

He said Club Med would leverage its global presence to attract international visitors. “We are a very powerful brand. We have a large base of loyal international customers who will trust us with their South African holiday. This is tens of thousands of international travellers that will come to us and they will also spend money and venture outside of the resort.” For us it is a brilliant addition to our existing portfolio of destinations.”