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IOL News
03-07-2025
- Business
- IOL News
A new era in housing: The Department of Human Settlements' essential shift from housing builder to settlement enabler
South Africa's post-apartheid housing landscape has long been shaped by spatial exclusion, urban fragmentation, and economic inequality. Image: Tracey Adams / IOL The challenge for the Department of Human Settlements (DHS) is to move from being a housing builder to a settlement enabler, ensuring that delivery is not just about numbers, but about equity, dignity and inclusion. This is according to Dr Uduak Johnson and Dr Thandile Ncwana, who are Academic Programme Leaders at the Management College of Southern Africa (MANCOSA) School of Public Administration, in response to an enquiry by "Independent Media Property". They described the first year of South Africa's 7th Administration, which came into office about a year ago following the 29 May 2024 elections, as being marked by cautious optimism and necessary institutional realignment. They said while progress has been uneven, key reforms such as governance strengthening, spatial policy recalibration and targeted investments in vulnerable groups signal a shift toward developmental governance. 'What remains now is for the 7th Administration's plans to be translated into tangible, community-centred outcomes.' Delivering the 2025 Budget Vote on Wednesday, DHS Minister Thembi Simelane said over the next five years, the Department's delivery efforts will be driven by a focused agenda that seeks to consolidate past investments, respond to urgent needs, and deepen our impact. 'Therefore, as we begin to lay the foundation of the recently approved 2024-2029 MTDP, we have committed to deliver the following during the 2025/2026 financial year: 41 944 housing units, 32 250 fully serviced sites with water, sewer, electricity, and roads, 4 282 units through the First Home Finance programme, originally known as FLISP (Financially Linked Individual Subsidy Programme), 3 000 social housing units and eradicate 8 047 mud houses,' Simelane said. Dr Johnson and Dr Ncwana said that despite the intent of policies such as Breaking New Ground (BNG) and the Comprehensive Plan for the Development of Sustainable Human Settlements, delivery has often occurred at the urban periphery, reinforcing marginalisation. They said by the time the 7th Administration took office last year, the backlog had grown to over 2.3 million housing units, with 2 700+ informal settlements nationwide and slow progress in land release and infrastructure upgrades. The academics said, despite severe budget constraints and inflationary pressures, the DHS has made incremental progress with highlights that include the Special Housing Needs Programme (launched March 2025), targeting vulnerable groups such as people with disabilities, elderly persons, and survivors of domestic violence. Another one is the Housing Assistance Programme for Military Veterans, fast-tracked, with 4 560 beneficiaries confirmed. They said it also brought Institutional Stabilisation as boards were appointed to five of six DHS entities, thereby improving governance oversight. With regards to policy advancements, the academic programme leaders mentioned the approval of a new Human Settlements White Paper in December last year, outlining integrated and sustainable development frameworks. They said with regards to Social Housing Expansion, the Social Housing Regulatory Authority (SHRA) approved 1 898 units in FY2024/25, while the SHIP 15A pipeline continues to grow. Additionally, they said digitalisation efforts have begun to improve beneficiary tracking and reduce fraudulent housing allocations, although their implementation is still partial. The MANCOSA academics said persistent and emerging challenges for the department included systemic constraints. 'Informal Settlement Growth: Upgrading initiatives remain underfunded and inadequately implemented. Although the Informal Settlements Upgrading Partnership Grant (ISUP) exists, the number of informal settlements continues to grow beyond 2 700.' They said there were also governance failures with reports from the Auditor-General (AGSA) and Special Investigating Unit (SIU) pointing to irregular expenditure, ghost beneficiaries, and project mismanagement, especially at provincial and municipal levels. The other challenge was the spatial disconnect as settlements remained far from transport, economic nodes, and services, continuing the apartheid legacy. The academic leaders said the budgetary pressures with reduced allocations to the Human Settlements Development Grant (HSDG) and the impact of inflation have constrained delivery. 'Provinces such as Gauteng and the Western Cape underspent and had portions of their HSDG reallocated to better-performing provinces like the Eastern Cape (99% expenditure).' To meet its long-term mandate, Johnson and Ncwana said the DHS must pivot from mass delivery alone to an enabling developmental role that prioritises spatial justice through the release of well-located urban land, upgrading over displacement in informal settlements, inclusive and participatory urban planning, including People's Housing Processes (PHP), blended finance models, combining public subsidies, private investment, and concessional loans as well as performance-based budgeting, where provinces are rewarded for efficient delivery. Independent Media Property
IOL News
26-06-2025
- Business
- IOL News
Bridging the gap: essential insights on property ownership for young black South Africans
Many black citizens have been denied the opportunity to fully understand the benefits and pathways to property ownership. The reality is that many segments of South African society have been historically disadvantaged when it comes to access to property ownership and understanding how it can be used to build generational wealth, says Stefan Botha, the Director at Rainmaker Marketing, in response to an enquiry from "Independent Media Property". Many younger black South Africans were unable to learn about property ownership from their parents, as it had not been a legal or practical option for previous generations. As an example, he said black South Africans were officially allowed to own property throughout the country in 1991 with the repeal of the Land Act and the Group Areas Act. He said that consequently, property ownership was rarely, if ever, discussed around the dining room table. 'This remains a significant issue in South Africa. Many citizens have been denied the opportunity to fully understand the benefits and pathways to property ownership, and we must work to change that. "One major consequence of this history is a widespread lack of understanding about good versus bad debt. As a result, many South Africans are heavily burdened by debt and have little disposable income, often due to acquiring short-term debt for cars and luxury goods. "This puts both individuals and the broader economy at a disadvantage,' Botha said. Last week, "Independent Media Property" reported that many young people do not understand the mechanics of buying or investing in property or how to plan financially for long-term ownership. Tsekiso Machike, spokesperson to the Minister of Human Settlements (DHS) Thembi Simelane, said the country must enhance financial literacy and property education, "therefore, incorporate property and financial literacy into high school and tertiary curricula". Machike said the country must also encourage entrepreneurship in real estate. 'Youth entrepreneurs in real estate are underrepresented but can unlock job creation and innovation in the sector.' The department said youth representation in South Africa's homeownership and property sectors is currently limited, adding that there is a noticeable shift towards investment-focused property purchases. 'Economic challenges remain a significant hurdle, but initiatives and advocacy efforts are emerging to support and empower young individuals in these sectors.' The ministry, which facilitates the creation of sustainable human settlements and improved quality of household life, said there is also a need to improve access to financing; promote First Home Finance to be more accessible, better publicised and easier to navigate for the youth, since many youths are excluded from traditional lending due to low or irregular incomes, lack of credit history or student debt. The property and lifestyle marketing agency said that a key aspect of this problem is that people often over-extend themselves financially by taking on the wrong kinds of debt, which leads to poor credit records. It said this creates a vicious cycle, making it even harder for individuals to enter the property market. There is also a critical need for greater education around improving and rebuilding credit scores and financial histories. This kind of knowledge is essential to helping more South Africans qualify for property financing in the future, it added. Botha, an experienced property expert, said he believes the responsibility lies with both the private sector and the public sector in working together to drive meaningful change in the local property and economic sector. He said from a private sector perspective, education around property ownership is absolutely critical. 'It starts with helping people understand the basics of property ownership - how debt can be acquired, how it works and how it can be used as a tool to build long-term wealth through property.' He said that from a public sector perspective, there needs to be a more unified and coordinated approach to promoting property ownership across South Africa. 'In my view, the government can play a much greater role in supporting and funding initiatives that provide property education and access, ensuring these efforts are rolled out nationally and reach all market segments.'
The Citizen
21-04-2025
- Business
- The Citizen
Practical financial tips to fast-track the journey to homeownership
The recent Budget Speech underscored the ongoing challenges facing the country, many of which will impact consumers. However, Gavin Lomberg, CEO of ooba Home Loans, emphasises that a favourable interest rate environment helps ease financial pressure, making homeownership more accessible for aspiring buyers. Adding to this, Lomberg notes that while saving for a deposit is always the obvious answer, there are various other avenues that homebuyers can leverage to generate further savings in the long-term. 'If planned carefully and correctly, the journey to homeownership can be a rewarding one,' he says. 'By taking calculated steps under the guidance of trusted professionals, would-be homeowners can save tens of thousands on their home loan, making homeownership an affordable and attainable goal.' Pointing to the prevailing trend of building generational wealth, Lomberg adds, 'Homeownership goes beyond simply owning 'four walls' and a place to live. Today, aspiring homebuyers are leveraging property ownership as a wealth creation strategy for their families and future generations.' Five Extra Ways to Save Purchase properties under the new transfer duty limit Effective 1 April 2025, and subject to approval by Parliament of SA's 2025 Budget, the threshold for exemption from paying transfer duty has been raised by 10% from R1.1m to R1.21m, with all subsequent tiers raised by 10%. 'This adjustment is particularly beneficial for first-time homebuyers where the average purchase price currently sits at just slightly over the R1.21m mark,' says Lomberg, adding that it reduces the upfront costs associated with buying a home and will enable more South Africans to realise their dream of homeownership. Transfer duties are taxes paid to SARS, starting at 3% of the purchase price, depending on the price bracket. However, Lomberg emphasises that buyers are still responsible for conveyancing fees, bond registration fees and Deeds Office fees. Use a home loan comparison service to secure a better interest rate 'Rather than simply approaching your bank for a home loan, it's strongly advised to shop around for comparative quotes,' says Lomberg. 'A home loan comparison service like ooba Home Loans will negotiate with multiple banks on your behalf, ensuring that they compete for your business. In a competitive lending environment, this can translate into significant monthly savings.' As an example, Lomberg notes that ooba Home Loans' average interest rate for customers is currently prime minus 0.55%. 'If you were to accept a home loan of R 1m at the current prime lending rate of 11%, you would pay R10,332 per month, versus R9,950 with an interest rate of prime minus 0.55%. Additionally, homebuyers can choose to pay the higher amount each month to pay off their home loan sooner.' Access the First Home Finance government grant The First Home Finance grant is a subsidy for first-time homebuyers earning between R3,500 and R22,000 per month. 'This government subsidy can either be paid towards a home loan or can be allocated towards a deposit,' explains Lomberg. To qualify, applicants must be: South African citizens living in South Africa. Not have received this housing subsidy before. Be married, cohabiting, or single with financial dependents. Be over the age of 18. Not have previously owned a residential property. The subsidy amount ranges between R30,001 and R130,505, depending on income and affordability. Take advantage of attractive bank discounts and incentives In a competitive lending environment, South Africa's major banks continue to attract buyers with special offers, competitive interest rates and other discounts. 'Each bank's offering differs, but homebuyers can benefit from incentives such as discounts on bond registration costs and an additional discount in their home loan interest rate when moving their primary banking account to the approving bank,' says Lomberg. Buy-to-let as a path to property investment For those looking to enter the property market, a buy-to-let strategy can be an effective way to start building generational wealth. 'Rather than living in their newly purchased home, the homebuyer rents it out while continuing to rent elsewhere or live with family or friends.' Known as 'rentvesting', this strategy allows buyers to generate rental income to help cover their home loan and related costs. 'Over time, homeowners may choose to expand their property portfolio or move into the home once they have greater financial flexibility.' By leveraging these financial strategies, whether through lower interest rates, government subsidies or strategic investment choices, homebuyers can make the path to homeownership more affordable and achievable. 'With careful planning and the right financial tools, securing a home in 2025 may well be more attainable than you first thought.' Issued by: Kristly Bartlett
Zawya
13-03-2025
- Business
- Zawya
South Africa's housing crisis: Why 2.2 million homes are needed immediately?
South Africa has a housing supply backlog of at least 2.2 million units, with a significant shortage in the affordable housing or 'gap market', according to a recent study by the Centre for Affordable Housing Finance (CAHF). The gap housing market is generally considered to be households earning too much to qualify for Reconstruction and Development Programme (RDP) housing but too little to obtain traditional bank-financed homes in the open market. Renier Kriek, managing director at Sentinel Homes, says 40% of consumers fall into the RDP housing category (household incomes below R3,500 per month) and the wealthiest 30% of households are well-served by the open housing market. Massive demand The gap market is the middle 30% of consumers where the supply of housing stock is extremely low and even declining despite massive demand. Kriek argues that a market design error is to blame for this high demand going unmet. Adverse market design disincentivises the holders of capital to invest in affordable housing. The biggest hurdle relates to the unnecessarily lengthy, cumbersome, and expensive processes associated with evictions and foreclosures. The cost of restarting the transaction (eviction or foreclosure) is prohibitive in South Africa and does not align with market circumstances. South Africa should adjust their regulatory environment to favour private-sector investment and the expansion of supply. 'We need to reduce the transaction cost for the holders of capital to take their chances on consumers who are not acceptable risks in the unduly high tenure security environment. In this way, some people will move into the formal housing market and fall out again, and perhaps more than once in their lifetime. If we go through enough of these cycles eventually everyone will be housed.' Kriek admits that this solution may sound slightly callous and counterintuitive to the casual listener. 'The alternative, retaining our restrictive policy environment, is even more callous and is currently barring people from ever getting the opportunity to enter the formal housing market. What use is being born free if you will never realise that constitutionally mandated right of access to adequate housing?' Unintended consequences Another prevalent and reasonably fixable market design problem relates to government subsidies. The Department of Human Settlements has been offering the First Home Finance (FHF) subsidy, previously called FliSP to households in the gap housing market. It aims to subsidise affordable first-time home-ownership opportunities for households with income from R3,501 up to R22,000 per month. It is an inverse means-tested subsidy, meaning that the cash grant is lower the higher the household income becomes. 'Millions of rands earmarked for this subsidy have remained unclaimed in the past and continue to remain unclaimed. This is not because people do not know about the incentive or do not desire it. The first challenge is the relative scarcity of gap housing stock, which is driven by poor demand due to incentives that are adverse to the deployment of capital in this segment, whether by landlords or home-loan providers.' Kriek argues that the subsidy design has unintended consequences resulting in market participants, such as estate agents, being unwilling to sell to subsidy recipients. 'Due to overzealous fraud-prevention measures and perhaps also an unwillingness to integrate into the existing market infrastructure, government has traditionally insisted that the registered title deed contains the name of the subsidy recipient before it releases the subsidy amount.' This means that the subsidy portion is usually received months after the transfer, unlike all other funds in a property transaction which are secured by third party payment functionaries such as banks or attorneys. This makes each property transfer involving a subsidy inordinately complex, and everyone involved prefers doing the same transaction with a consumer who does not rely on a subsidy. Usually, it's the estate agent waiting for the subsidy payment to receive their commission, and that is simply an unacceptable adverse incentive if government's intention is to have the subsidy reach its intended recipients.' Subsidy system chaos Though recent developments seem to favour fixing the market design shortcomings of FHF, the administration of the subsidy remains positively byzantine. There is a national subsidy authority, that can approve and pay subsidies, and a separate subsidy authority for each of the provinces, each with a unique set of rules and procedures and a separate application procedure. This is a quagmire for lower income consumers to navigate successfully, especially where those who rely on subsidies are already viewed negatively by market intermediaries such as estate agents and transferring attorneys. It will take significant political capital to implement market design solutions that can solve the problems facing the gap housing market. If we do nothing it may even get worse, says Kriek, who fears that the current government may not have the ability to adequately diagnose the problem, and much less the political will to affect the necessary policy and regulatory changes. If successful, finding solutions to the housing supply problem could significantly contribute to job creation, supporting the government's recent efforts outlined in the President's State of the Nation Address. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
