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IOL News
17 hours ago
- Business
- IOL News
How the housing crisis impacts low-income families in South Africa
An artist's impression of the proposed housing projects on Highlands Drive. Image: Supplied As Minister Thembi Simelane tables the Department of Human Settlements (DHS) budget vote on Wednesday, South Africa's low-income households contend with an acute shortage of formal housing stock. According to data analysed by Lightstone, a provider of analytics and systems on property, there was one property for 4.8 households earning under R13 000 a month. The ratio improved to 3.3 households for every one formal property if the salary threshold moved to R26 000 a month, said Hayley Ivins-Downes, the managing executive for real estate at Lightstone Property. For higher income groups, this ratio was closer to 1.2 to 1. 'Either way, more than 80% of South Africa's households earned under R26 000 per month, which meant affordability remained a major obstacle to most households having a property to call their own,' Ivins-Downes said. The property market intelligence provider said there were nearly 12 million households earning less than R13 000 a month, with just under 2.5 million properties available if households stuck to the guideline that they spend no more than a third of their income on housing. Ivins-Downes said this was the most significant gap between households and property available by some distance. 'For example, there were another 2.5 million households earning between R13 000 and R26 000 per month, but there were 1.8m properties available, which translated into 1.3 households for every property available.' Interestingly, there were more properties available than households in the R26 000 to R40 000 salary range. In Johannesburg, couples without matric were said to find affordable stock in areas such as Hillbrow, Johannesburg Central and Orange Farm, while couples with degrees would be buying in suburbs such as Morningside, North Riding and Weltevreden Park. The Fact Sheet that draws the attention of policymakers and other stakeholders to the progress made by South Africans in terms of their highest levels of educational attainment (HLEA), said the proportion of the 25–64-year-old population that had secondary (Grade 12 or equivalent) as the HLEA increased from 27.4% in 2015 to 33.0% in 2023. Persons with the certificates in 2023 of the 25–64-year-old group were at about 3.3%. In 2023, about 6.0% of South Africans aged 25-64 years had a diploma as their HLEA, while 7.3% of this age group had a degree as their HLEA. The largest proportion of the population aged 25–64 years (36.7%) had some secondary education as their HLEA, while 12.4% of persons in this age group had primary education or less than primary as their HLEA. Lightstone said their insights underscored the need for integrated housing, education, and economic policies to address the real barriers facing South Africa's lower-income households. In May, RB Property Group said it advocated for a multi-sectoral approach to housing, one that not only builds homes but also builds communities. The property industry player said it believes that the key to transforming South Africa's housing crisis lies in moving the majority of LSM 1-3 households into LSM 4-6 through job creation, enterprise development, and skills training. It said this requires aligning housing development with sustainable job creation, skills development, and long-term economic participation. Get your news on the go, click here to join the Cape Argus News WhatsApp channel. Cape Argus
IOL News
a day ago
- Business
- IOL News
South Africa's low-income households face severe housing shortage: a call for action
South Africa is facing a national housing backlog of approximately 2.4 million units. Image: Supplied As Minister Thembi Simelane tables the Department of Human Settlements (DHS) budget vote on Wednesday, South Africa's low-income households contend with an acute shortage of formal housing stock. According to data analysed by Lightstone, a provider of comprehensive data, analytics and systems on property, automotive and business assets, there was one property for 4.8 households earning under R13 000 a month. The ratio improved to 3.3 households for every one formal property if the salary threshold moved to R26 000 a month, says Hayley Ivins-Downes, the Managing Executive Real Estate, Lightstone Property. For higher income groups, this ratio was closer to 1.2 to 1. 'But either way, more than 80% of South Africa's households earned under R26 000 per month, which meant affordability remained a major obstacle to most households having a property to call their own,' Ivins-Downes said. The property market intelligence provider said there were nearly 12 million households earning less than R13 000 a month (see graph below), with just under 2.5 million properties available if households stuck to the guideline that they spend no more than a third of their income on housing. Ivins-Downes said this was the most significant gap between households and property available by some distance. 'For example, there were another 2.5 million households earning between R13 000 and R26 000 per month, but there were 1.8m properties available, which translated into 1.3 households for every property available.' Interestingly, there were more properties available than households in the R26 000 to R40 000 salary range. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Next Stay Close ✕ The managing executive said this, then pushed many into backyard rentals, informal structures or traditional dwellings that were not formally registered- and often these options were further away from work than is ideal. 'In many towns, lower-income working people struggled most to find accommodation while property values rose for the more affluent.' For homes valued under R300 000- 80% of which were subsidised- only 1% had been bought or sold in the last five years compared to 4% in the R300 000 to R500 000 price band, 6% in the R500 000 to R750 000 price band and 13% in the R750 000 to R2m price band. Ivins-Downes said the data showed that not only was there a significant shortage of affordable housing, but there were proportionately fewer transactions among lower-income earners, limiting mobility, equity growth, and broader economic participation. The company said an analysis of the data showed that the more education households have, the more likely they are to be able to buy houses in higher price bands. 'For example, a household with two working people who did not have a matric would likely be able to afford a house valued at R250 000, but this jumped to R380 000 where the two have a matric and to R1.8m when they have degrees,' Ivins-Downes said. She said mapping these affordability scenarios to actual suburbs showed how the difference in education-and consequently earning potential-affected housing choice. In Johannesburg, couples without matric were said to find affordable stock in areas such as Hillbrow, Johannesburg Central and Orange Farm, while couples with degrees would be buying in suburbs such as Morningside, North Riding and Weltevreden Park. The Fact Sheet that draws the attention of policymakers and other stakeholders to the progress made by South Africans in terms of their highest levels of educational attainment (HLEA), said the proportion of the 25–64-year-old population that had secondary (Grade 12 or equivalent) as the HLEA increased from 27.4% in 2015 to 33.0% in 2023. Persons with the certificates in 2023 of the 25–64-year-old group were at about 3.3%. In 2023, about 6.0% of South Africans aged 25-64 years had a diploma as their HLEA, while 7.3% of this age group had a degree as their HLEA. The largest proportion of the population aged 25–64 years (36.7%) had some secondary education as their HLEA, while 12.4% of persons in this age group had primary education or less than primary as their HLEA. Lightstone said their insights underscored the need for integrated housing, education, and economic policies to address the real barriers facing South Africa's lower-income households. In May, RB Property Group said it advocated for a multi-sectoral approach to housing, one that not only builds homes but also builds communities. The property industry player said it believes that the key to transforming South Africa's housing crisis lies in moving the majority of LSM 1-3 households into LSM 4-6 through job creation, enterprise development, and skills training. It said this requires aligning housing development with sustainable job creation, skills development, and long-term economic participation. According to the latest OECD Economic Survey of South Africa, released last month, South Africa has extraordinary growth potential, though low public investment and high costs of doing business have been holding back growth. It said major structural reforms are needed to boost productivity and advance the country towards meeting its goals of durably reducing poverty and unemployment. It projected that real GDP will grow by 1.3% this year and 1.4% in 2026. It added that unemployment will remain elevated, at close to 32% in 2026. Inflation is projected to decline to 3.2% in 2025 before increasing to 4.2% in 2026 as economic activity gains momentum. Prudent macroeconomic policies and structural reforms are central to durably boost productivity and employment, Luiz de Mello, the OECD Director of Country Studies, said then. The global policy forum said to unlock job creation, reform needs to ease barriers to business dynamism and align transport and housing policies and urban planning. It said this includes prioritising housing near public transport, promoting rental housing near city centres and reforming restrictive building regulations. Independent Media Property
IOL News
2 days ago
- Automotive
- IOL News
49% of SA's cars come from one country, and it's not China. But is local manufacturing in trouble?
84% of Japanese-branded vehicles sold in South Africa are sourced from India, including popular models like the Toyota Starlet Cross. Image: Supplied South Africans are buying fewer locally produced vehicles than ever before, sparking fears of deindustrialisation as the market's appetite for affordably priced imports grows. Although the growing array of Chinese brands offered locally is usually seen as the greatest threat to local manufacturers, the vast majority of South Africa's imported cars actually originate from India, according to the latest data from Lightstone. 36% of all the vehicles sold in South Africa in 2024 were imported from India, Lightstone said, while 37% were locally manufactured. Chinese imports accounted for just 11% of vehicle sales last year. Where SA's vehicles are built: 2009 versus 2024. Image: Lightstone When we exclude the bakkies and light commercial vehicles, India's share grows to almost half of our market. Lightstone figures for the first five months of 2025, shared exclusively with IOL, show that 49% of all passenger vehicle sales were imports from India. The majority of these vehicles emanate from the Maruti Suzuki operation in India, which also supplies Toyota with vehicles such as the Starlet, Starlet Cross, Vitz and Urban Cruiser. Suzuki Auto's own vehicles, such as the Swift, Baleno and Fronx, are also gaining market share, with the new-generation Swift having dominated the passenger car market on numerous occasions in 2025. Interestingly, 84% of all the Japanese-branded light vehicles sold in South Africa in 2024 were imported from India, Lightstone said, with just 10% actually built in Japan. Likewise, the majority of South Korean (81%) and French branded vehicles (74%) are also sourced from India. 'The growth in vehicle sales originating in India can be attributed to the large number of vehicle manufacturers now producing vehicles in the country, leveraging the relatively cheap cost of labour and overall manufacturing costs,' said Andrew Hibbert, Auto Data Analyst at Lightstone. Affordably priced Indian- and Chinese-build vehicles have, on the one hand, become a significant blessing to cash-strapped South African consumers. Yet it is of concern that in 2009, around half of the light vehicles sold in South Africa were locally produced. In that year, just 5% of our vehicles were sourced from India. Does this mean that South Africa's local manufacturing industry is in trouble? Although Toyota SA head Andrew Kirby has warned of a slow and steady 'deindustrialisation', and other CEOs such as Ford's Neil Hill and VWSA's Martina Biene have also expressed serious concerns about local manufacturing feasibility, South African carmakers have shifted their focus to exports, while gradually increasing production volumes over the years. For instance, 632,000 vehicles were produced locally in 2023, up from 571,000 in 2016. 2023 was a record year for SA vehicle exports, with 399,000 vehicles shipped abroad, according to Naamsa, and although 2024 saw a dip to 308,000 exports, the value of these exports actually increased and the lower volumes were largely seen as a temporary setback due to economic conditions abroad. 2024 Toyota Hilux Raider facelift South Africa There remains a massive demand for locally-produced bakkies, such as the Toyota Hilux. Image: Supplied Also somewhat encouraging is that South Africa's five top-selling vehicles in 2024 were locally produced. These were the Toyota Hilux (32,656), VW Polo Vivo (25,913), Ford Ranger (25,533), Toyota Corolla Cross (21,861) and Isuzu D-Max (11,153). But below that, gradually eating into the volumes of locally produced cars and bakkies, is a proliferation of affordably priced SUVs imported from India and China.
IOL News
25-06-2025
- Business
- IOL News
Your guide to buying property: tips for first-time buyers
Discover the challenges and opportunities for first-time homebuyers in the Western Cape. With insights from industry experts, learn about affordable areas, creative strategies, and the growing appeal of the region for both local and international buyers. Image: Todd Goodman The Western Cape continues to be one of South Africa's most desirable regions for property investment, luring interest from both local and international buyers. Yet for many first-time homebuyers—especially those eyeing Cape Town—the dream of homeownership can feel increasingly out of reach. According to ooba Home Loans' latest oobarometer, the average purchase price in the Western Cape during Q1 2025 stood at a staggering R2.33 million, significantly above the national average of R1.66 million. Nevertheless, activity among entry-level buyers has not waned—proof that creative solutions and alternative strategies are helping many take that important first step onto the property ladder. 'We're seeing many young professionals and investors gravitating towards the Western Cape for its lifestyle, infrastructure, and perceived safety, but affordability in the metro remains a challenge, especially for those trying to enter the market for the first time,' explains Grant Smee, CEO of Only Realty Property Group. Despite the province's high price point, Lightstone data shows that 40% of housing stock in the Western Cape is priced under R750,000. However, most of these properties are concentrated in smaller towns and rural areas. 'Investment properties are also in high demand, with the Western Cape recording a year-on-year increase of 0.5% to reach 12.9% in the first quarter [ooba Home Loans]. There is a growing trend of first-time homebuyers purchasing in the Boland and Overberg regions in smaller, outlying towns,' says Smee. 'These areas offer a more balanced lifestyle and slightly more accessible pricing, while still benefiting from the broader Western Cape infrastructure.' Within Cape Town, many new buyers are opting for micro-apartments and sectional title units in high-density, mixed-use developments. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading 'These offer security and lifestyle perks like on-site retail, communal workspaces, and gyms,' Smee adds. The province's magnetic global appeal hasn't gone unnoticed. While the local market wrestles with affordability, foreign investors are entering at the higher end. 'According to Lightstone data, the province leads in luxury price bands, with international homebuyers accounting for over 40% of purchases above R10 million, around 25% in the R5 to R10 million range and approximately 15% in the R3 to R5 million bracket,' says Smee. 'Compared to global cities, the Western Cape offers strong value. For instance, the average price of a home in one of the region's upmarket suburbs sells for around R10 million. To purchase an apartment in London, with considerably less living space, homebuyers will pay upwards of R12 million.' This sentiment is echoed internationally. The Australian Property Investor recently reported that South Africans pay around R17,000 per square metre for a median-priced home, compared to R113,000 in Australia. While Cape Town remains a prime property hotspot, buyers are expanding their search. 'The Western Cape's so-called 'Zoom' towns – so-called for their remote working appeal – include Pringle Bay, Betty's Bay, Kleinmond, Malmesbury, Hermanus, and Gansbaai,' says Smee. 'These areas provide easier entry points for buyers and remain within comfortable reach of Cape Town.' Beyond the Western Cape, other provinces offer compelling options. 'Mpumalanga, for instance, is currently leading the pack when it comes to home loan applications from first-time buyers [ooba Home Loans]. Nelspruit, in particular, is booming with new estate developments that offer a secure, lock-up-and-go lifestyle, community atmosphere, and budget-friendly pricing.' Gauteng continues to draw buyers seeking well-established infrastructure. 'Popular nodes like Waterfall, Bryanston, and Hyde Park are drawing interest from buyers seeking well-established infrastructure and upscale living,' Smee adds. KwaZulu-Natal's North Coast has emerged as an investment beacon. 'Over the past decade, this region has experienced massive growth, with estate developments, excellent schools, security, and community-driven living making it an increasingly worthwhile investment.' The Eastern Cape is also gaining ground, with towns like Jeffreys Bay and Kenton-on-Sea growing in popularity among short-term rental investors. 'These regions combine access to economic centres with a strong lifestyle appeal, without the Cape Town price tag,' Smee explains. 'For buyers willing to expand their horizons beyond the Western Cape, there are standout opportunities, many in secure estates or fast-growing nodes. And with many of these areas doubling as holiday destinations, they open the door to 'rentvestment' opportunities, whether for short-term letting or longer-term leasing.' Smee advises that while buying in the Western Cape might require more strategy and patience, the long-term rewards make it worthwhile. 'For homebuyers determined to get a foothold in the Western Cape property market, there are many options available. This investment is well worth it too as the average growth of property in the province is around 7.4%.' Top tips include: Enter into a joint home loan : Co-buying with a friend, partner or sibling can boost affordability and borrowing power. Save smart and plan long-term : Set clear savings goals and budget realistically for transfer and attorney fees. Start on the outskirts : Neighbourhoods just outside key metro areas often offer more accessible prices and are poised for growth. Buy a fixer-upper : Properties in need of a bit of work can often be negotiated at lower prices and renovated over time. Buy-to-let as a stepping stone : Purchase an investment property in a growing node while renting where you live. 'The Western Cape is a great place to invest, but it could require a bit more creativity and long-term thinking for first-time homebuyers to make it work. Alternatively, if the Western Cape doesn't meet your criteria, regions like the Eastern Cape, KwaZulu-Natal, and Mpumalanga have potential. It's not about compromising your goals, but rather being strategic,' says Smee. PERSONAL FINANCE
The Citizen
25-06-2025
- Business
- The Citizen
Flexible, tech-savvy and independent – SA's youth is shaping the property market
South Africa's youth may be entering the property market later than previous generations — but when they do, they're doing it on their own terms. From flexible co-living spaces to joint bonds with friends, Gen Z and Millennial buyers are challenging the old rules of homeownership, says Bradd Bendall, BetterBond's national head of sales. Recent data from BetterBond and Lightstone shows that buyers under 35 now account for nearly a third of all residential property transactions, with first-time buyers — 69% of whom are under 35 — dominating home loan approvals. 'Younger buyers are still very active in the home loan space, even if they're waiting a bit longer to make their first purchase,' says Bradd Bendall, BetterBond's National Head of Sales. 'They're approaching property investment with a more considered, flexible mindset.' Lightstone data shows that buyers aged 20 to 35 accounted for nearly a third of all residential property transactions in 2024, making them the second-largest buyer group after those aged 36 to 50. BetterBond data, meanwhile, reveals the average age of a first-time buyer is now 37, suggesting that many are choosing to wait until they are financially stable before stepping onto the property ladder. Yet they are still a force to be reckoned with: FNB reports that first-time buyers made up nearly 68% of all bond approvals in April 2024, with 69% of those falling within the 'youth' category. Gen Z: digital-first and flexible The younger cohort of this market — Gen Z buyers aged 20 to 28 — are especially tech-savvy and values-driven. They want homes that support smart technology, sustainability, and flexible living arrangements. 'These buyers are open to alternatives like micro-apartments for lock-up-and-go living, or co-living spaces with shared amenities,' explains Bendall. 'They're also more likely to apply for joint bonds with friends or family to increase affordability — and many qualify for 100% loans.' Gen Z prefers to manage their homebuying journey digitally — from affordability calculations to pre-approval and bond applications — often using BetterBond's online tools. Millennials: independent and investment – wise Millennials (aged 29 to 44) are taking a different path — but they're just as determined. 'We're seeing a strong trend among Millennial buyers, especially single black women under 40, who are choosing to buy property independently rather than wait for marriage,' says Bendall. This group is strategic: they're open to joint bond partnerships with friends, rentvesting (buying in affordable areas while renting where they want to live), and focusing on lifestyle over size. Many prefer smaller sectional title homes or apartments in mixed-use, security estates — especially in vibrant urban areas like Cape Town's CBD. As research from audience research company GWI shows, Millennials want to invest in their health and wellness, lifestyle is an important consideration when it comes to buying a home, says Bendall. 'The size of the property is less important than its location and access to amenities.' Bigger budgets, bigger ambitions Younger buyers are also spending more on property than they did last year. BetterBond's application data shows that Gen Z buyers are now spending an average of R1.5 million — up almost 7% and Millennials are averaging around R1.25 million on a home purchase. Part of this increase is due to rising home prices, but improved income levels and a more favourable interest rate outlook play a hand too. Importantly, the transfer duty threshold has been raised to R1.21 million, making property more accessible to this group of buyers. Market outlook The rise of younger buyers — especially in the first-time buyer segment — is a strong driver of home loan activity and an encouraging sign of renewed confidence in the housing market. Their demand for flexible, affordable, and digital-first solutions is reshaping how developers design homes and how estate agents manage transactions, adds Bendall. For example, developers are increasingly including co-living spaces, energy-efficient features, and remote working hubs in new builds, while estate agents are streamlining the buying process with virtual tours, online bond calculators, and digital application tools. 'Today's young buyers know what they want — and they're not afraid to rewrite the rules to get there,' says Bendall. 'That's good news for the future of the South African property market.' Issued by Lia Mundell
