In its June 2025 Property Newsletter, data provider Lightstone revealed that only one formal house exists for every 3.3 families earning under R26,000 per month. This group represents more than 80% of South African households, underscoring the scale of the affordability crisis in the residential property market.
“There’s something very wrong if such a large demand is not being met,” says Renier Kriek, Managing Director of Sentinel Homes. “The problem is well known in the property industry, yet no real solutions are forthcoming from government actors who are responsible for solving these issues in the housing market.”
Since 2000, South Africa’s population has grown by 19.3 million, but the economy has managed to produce just 1.9 million new houses. This imbalance reflects systemic failures that go far beyond the property market itself, highlighting a significant economic problem.
Rising construction costs, slow residential building approvals, and decades of stagnant wage growth have made property increasingly unaffordable. For over 70 years, house prices have outpaced wages globally, and South Africa is no exception in this global property trend.
Low economic growth further compounds the issue, leaving many low- to middle-income earners unable to close the gap between rising property prices and stagnant earnings. This has led to a decline in housing loan growth and limited access to mortgage loans for many South Africans.
Kriek argues that structural reforms are essential to improve the housing market outlook:
“Making such changes at a national level will ensure that problems in the property market are not intractable,” Kriek adds.
Within the housing sector, several barriers also restrict affordability:
“The government can offset these deterrents with tax breaks or programmes that release land specifically for low-cost housing,” suggests Kriek.
If 80% of South Africans cannot afford housing, the system itself is broken. The private sector has both the money and the profit motive to meet demand, but systemic obstacles prevent this from happening in the residential property market.
“The private sector is profit driven, and the demand clearly exists,” says Kriek. “It’s up to the government to create incentives and ease restrictions so resources can flow to where the demand already exists in the housing market.”
Ultimately, solving the affordable housing crisis in South Africa requires both national economic reforms and sector-specific changes. Without decisive action, millions will remain priced out of owning a home, perpetuating inequality for future generations. The housing market outlook remains challenging, but with the right interventions, there’s potential for positive change in the property market.
A comprehensive property market analysis suggests that addressing these issues could lead to more balanced house prices, improved gross rental yields, and a more accessible housing market for all South Africans. By focusing on both the economic problem and specific challenges in the residential property market, South Africa can work towards a more equitable and sustainable housing solution.
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