South Africa’s housing market continues to fall short for low-income households.

New data from Lightstone highlights the severity of this gap: for every 4.8 households earning under R13,000 per month, there is just one formal property available.

The situation improves slightly for those earning up to R26,000 per month, where the ratio stands at 3.3 households per formal property. In contrast, higher-income households face far less pressure, with a ratio of just 1.2 to 1.

However, this doesn’t reflect the experience of most South Africans. More than 80% of households earn less than R26,000 a month, meaning the vast majority face significant barriers to owning a home, Lightstone said.

Because of this affordability gap, millions are pushed into informal living arrangements – backyard rentals, unregistered dwellings, or structures far from employment hubs, it said.

This disconnect is most visible in towns where rising property values benefit the affluent, while working-class residents struggle to secure housing near their jobs.

There are nearly 12 million households earning below R13,000 per month – but only 2.5 million properties available within their affordability range, assuming they spend no more than a third of their income on housing.

This income group faces the largest supply-demand gap by far.

Households earning between R13,000 and R26,000 per month face a slightly better, but still significant, mismatch: 2.5 million households vs. 1.8 million available properties – a 1.3 to 1 ratio.

Interestingly, the market begins to tilt in the opposite direction for those earning between R26,000 and R40,000, where there are more properties available than households.

The problem isn’t just supply — it’s also mobility. For homes valued under R300,000 (80% of which are government subsidised), only 1% have changed hands in the last five years. By comparison:

• 4% of homes priced R300,000 to R500,000 were sold,
• 6% of R500,000 to R750,000 homes were transacted,
• And 13% of homes between R750,000 and R2 million were sold.

This limited turnover in lower price bands means less mobility, slower equity growth, and fewer opportunities for lower-income households to participate in the broader economy.

Lightstone noted that there’s a strong link between education levels and housing affordability. Households with two working adults who haven’t completed matric can typically afford homes worth around R250,000.

If both have a matric, that figure jumps to R380,000. With university degrees, it rises dramatically – to R1.8 million.

In Johannesburg, couples without matric are likely to find homes in areas like Hillbrow, Johannesburg Central, and Orange Farm. Those with degrees are shopping in suburbs such as Morningside, North Riding, and Weltevreden Park.

In Cape Town, the pattern is similar, with education levels influencing whether a household can access the affordable outskirts or central, higher-value areas, the data specialist said.