Executive Summary
Success needs hard work. Based on title deeds data as of 31 December 2023, this report offers an analysis South Africa’s residential property market with a particular focus on the bottom of the property ladder, including affordable housing and houses delivered through South Africa’s national subsidised housing programme.
Market segmentation by property value enables a more nuanced view of housing stock and performance in the low value market. Indicators also reveal trends in access to finance by low income households and mortgage lending activity at the bottom end of the housing market.
The data reflects that, after two years of increased market activity post-COVID, transactions in 2023 took a knock, with 20% fewer transactions taking place and 26% fewer bonds issued than in 2022. This is likely due to rising interest rates which were sustained into 2024.
In 2023, South Africa’s residential property market comprised 6.91 million properties and was valued at R6.789 trillion. Importantly, 76% of those properties were valued under R1.2 million while two-thirds were valued at R900 000 or less.
The stock of low-value residential properties is largely due to government’s massive public investment in housing over the years. At present 32% of residential properties were subsidised by government, comprising 2.183 million units.
Given that this report is based on deeds data, it does not include the large number of houses that are part of the title deed backlog. If these properties were also included, the share of government subsidised properties in the overall residential market would be 43%.
Source: CAHF's Citymark, using deeds registry data supplied by Lightstone Pty. as at 31 December 2023 (sourced March 2024)..
About this report
This report utilises deeds registry data as of 31 December 2023 which was obtained from Lightstone Pty Ltd. in March 2024. Because of this, the report only covers properties which appear on the deeds registry (the formal market) – it does not include backyard units and informal settlement dwellings. According to the 2023 General Household Survey, 12.2% of South African households live in informal dwellings.
The 2022 Census indicates that there are now 17.8 million households in South Africa, of which 23.2% live in rented dwellings. Given that more than one family might live in a rental property with a single title deed— for example, a high-rise building—the data in this report also does not provide a clear picture of the approximately 4.1 million households who stay in rented dwellings.
This report uses seven market segments to provide a more nuanced picture of the overall residential property market, with particular attention to lower value properties. Valuations are provided by Lightstone and are not based on municipal valuation rolls.
See page 15 for further information on the methodology. This report was written by Alison Tshangana.
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How big is the market?
Size and distribution of the residential property market
At the end of 2023, the total value of the residential property market in South Africa reached R6.789 trillion, comprising over 6.91 million properties. Residential properties make up 89.3% of total properties in the country, by volume. Compared to 2022, the total residential property portfolio increased nominally by just 2.17% in value, compared to a larger 3.78% increase from 2021 to 2022 as the economy emerged from COVID.
Residential property is the most substantial component of household asset wealth for many South Africans. These properties range from sectional title and freehold properties, to residential dwellings in private estates; they include government-subsidised properties (GSP), homes occupied by their owners or rented to others, and holiday homes; and they span rural areas, mining towns, small towns, secondary or intermediary cities, and metro municipalities.
Urbanisation plays a pivotal role in driving demand for housing in urban areas. According to UN Habitat (World Cities Report 2022), South Africa is one of the most urbanised countries in Africa, with approximately 67% of the population living in urban areas in 2020, rising to 72% by 2030. According to the 2022 Census, 40% of the population live in the metros. As a consequence, 57% of residential properties country-wide are located in the eight metros, constituting 68% of the total value of the residential market.
South Africa’s annual average rate of change of the urban population dropped from to 1.97% for 2015-2020, to 1.72% for 2020-2025, and will continue to slowly decline to 2035 (UN-Habitat). This would suggest that the increased demand for housing in urban areas will continue to increase, but at a slower rate going forward.
Looking at the provincial distribution of residential properties, the top pie graph shows that Gauteng and the Western Cape contain the lion’s share of the total value of the national market (38% and 30% respectively).Cape Town alone accounts for one fifth of the total value of South Africa’s residential property market (20.7%) while Johannesburg contains another 16.3%.
Our analysis of the residential market divides the properties into seven market segments by value, with the focus on the lower end of the property ladder:
• Entry market—properties worth R300 000 or less
• Affordable market—R300 000 – R600 000
• Conventional market —R600 000 – R900 000
• High-end market—R900 000 – R1.2 million
• Lower luxury market—R1.2 million – R1.5 million
• Mid luxury market—R1.5 million – R3million
• Top luxury market—R3 million and above
At the end of 2023, the majority of residential properties in South Africa (nearly 66%) were valued at R900 000 or less (bottom pie graph). Of the total residential properties, 29% were entry-level homes valued less than R300 000 (1.987 million residential properties). The majority of houses in the entry-level market (69%) are government-subsidised homes, demonstrating the enormous impact of public investment in the sector.
Within the housing sector, definitions of ‘affordable housing’ vary amongst developers, lenders and government. However regardless of the precise threshold for ‘affordable’, its clear that most of the residential property market—in volume—is at the lower end. Approximately 76% of all residential properties are valued under R1.2 million.
Provincial share of total value of residential property market, 2023
Total value of SA residential property market: R6.789 trillion
