Despite high interest rates and a buyers’ market, affluent individuals continue to build new homes or expand existing ones through top-up loans.

According to Standard Bank, clients aged 30 to 50, particularly those earning over R50,000 a month, remain active in the building loan market, with loan values rising compared to two years ago.

Gauteng and the Western Cape lead in building loan registrations, with both provinces seeing a growing number of top-up loans.

Standard Bank has identified emerging trends such as constructing multiple units on a single erf, often for rental income but without sectional titles to avoid extra costs.

Toni Anderson, head of Home Services at Standard Bank, said: “These owners typically don’t plan to sell and prefer not to sectionalise due to time and cost.”

Another trend is the conversion of properties into multi-tenanted dwellings, though banks avoid lending for such projects due to zoning and infrastructure concerns.

“Many of our clients are taking a different approach to wealth creation,” said Chiko Manokore, head of personal and Private Banking at Standard Bank, “but they need to consider the long-term implications”.

Building multiple units without sectional titles may seem cost-effective now but could lead to future challenges. Manokore noted that “short-term decisions can lead to challenges later, especially if market conditions or personal circumstances change.”

The growth of homesteads in rural areas, particularly in provinces like North West, Limpopo, and KwaZulu-Natal, is notable. High-income clients often invest in large homes for their parents or grandparents, creating a multi-generational legacy. However, these properties sometimes lack title deeds, presenting a legal challenge.

“It’s crucial to document ownership and allocation of land to avoid disputes,” Manokore said.

With fewer than 15% of South Africans having a will, the importance of proper legal documentation cannot be overstated. Standard Bank emphasizes the need for careful planning to preserve wealth for future generations.

“We pair all our private bankers with advisers to ensure all blind spots are covered for our clients,” said Manokore.