By the end of 2023, South Africa's residential property market reached a total value of R6.789 trillion, encompassing over 6.91 million properties. Residential properties account for 89.3% of all properties in the country by volume.
This is according to the South Africa Housing Market report 2024, published by the Centre for Affordable Housing Finance Africa and utilising deeds registry data as of 31
December 2023 which was obtained from Lightstone.
The total value of residential properties rose by a modest 2.17% from 2022 to 2023, a slowdown compared to the 3.78% growth seen from 2021 to 2022, when the economy was rebounding from the effects of the pandemic.
For many South Africans, residential property represents a significant portion of household wealth. These properties vary from sectional titles and freehold homes to dwellings in private estates and government-subsidised housing.
They are located in urban centres, rural areas, mining towns, and metro municipalities, and serve various purposes such as owner-occupation, rental, or holiday homes.
Urbanisation is a key driver of housing demand in South Africa’s cities. According to the 2022 UN Habitat report, about 67% of South Africa’s population lived in urban areas by 2020, with projections showing this could rise to 72% by 2030.
The 2022 Census indicates that 40% of the population resides in metro areas, and 57% of the country’s residential properties are concentrated in the eight metros, which account for 68% of the total residential market value.
South Africa’s urban population growth rate has slowed in recent years, with projections suggesting a further decline. However, urban housing demand is expected to continue, albeit at a slower pace.
In terms of provincial distribution, Gauteng and the Western Cape hold the largest shares of the residential property market value, at 38% and 30%, respectively. Cape Town alone accounts for 20.7% of the total national market, while Johannesburg represents 16.3%.
The residential property market is divided into seven segments based on value. At the lower end of the market:
Entry-level homes are valued at R300,000 or less
Affordable homes range from R300,000 to R600,000
Conventional homes are between R600,000 and R900,000
High-end homes range from R900,000 to R1.2 million
Lower luxury homes range from R1.2 million to R1.5 million
Mid-luxury homes are between R1.5 million and R3 million
Top luxury homes exceed R3 million in value.
By the end of 2023, around 66% of residential properties in South Africa were valued at R900,000 or less, with 29% of these being entry-level homes (valued under R300,000).
A significant portion (69%) of entry-level properties are government-subsidised, highlighting the critical role of public investment in housing.
While the definition of ‘affordable housing’ can vary, it’s clear that most of South Africa’s residential market, by volume, is concentrated in the lower price segments, with 76% of all residential properties valued below R1.2 million.
Comments