Explore the growing demand for affordable housing in South Africa, driven by urbanisation and economic pressures, as Standard Bank reports a significant increase in home loans for properties priced between R350,000 and R700,000.
Image: File
While many consumers in South Africa steer through the headwinds faced by the country's economy, the affordable housing sector has seen a surge in demand for properties priced between R350,000 and R700,000.
Standard Bank said it reported a double-digit increase in activity within this market over the past four years, driven by ongoing urbanisation, which continues to intensify the need for accessible housing in metropolitan areas.
“This segment continues to show resilience, particularly in Gauteng and the Western Cape, where demand remains strong despite economic pressures,” said Toni Anderson, Head of Standard Bank Home Services.
The primary buyers, however, despite the convenience, cost-saving and home upgrading potential that comes with renting or owning solar panels, they also comes with several risksf these affordable homes are households earning up to R30,000 a month, the bank's data reflected.
Standard Bank further stated that the uptake of sectional title homes has more than doubled in the past four years, when compared to the four years leading up to 2020; however, the majority of buyers still prefer full-title, standalone houses.
“These are likely to be in the outskirts of key metros, but strong sales suggest buyers are willing to make that trade-off for full-title homes,” Anderson added.
Provinces like KwaZulu-Natal and the North West have seen rapid growth in home loan uptake for affordable housing, Gauteng leads the market.
In the four years up to February 2025, Gauteng accounted for 47% of all affordable housing loans issued by Standard Bank, a pattern that persisted even before the pandemic.
Despite rising house prices, the Western Cape has remained active in the affordable housing market, a trend it has consistently shared with Gauteng.
Over the four years leading up to February 2025, the Western Cape accounted for 18% of all affordable housing loans issued by Standard Bank, with KwaZulu-Natal following in third place at 12%.
“When you look at the Western Cape and Gauteng, you see significant private sector investment in affordable housing projects and urban development. This has spurred growth and created more opportunities for first-time home buyers who typically look at this price range,” Anderson said.
Anderson added that the Western Cape and KwaZulu-Natal’s strong performance aligns with their status as two of the top three provinces for first-time home buyers, many of whom seek properties in the affordable price range.
Anderson further said, "For first-time buyers, the bank offers up to 108% bond financing to cover upfront costs such as registration and transfer fees. Additionally, it provides re-advances, making it easier for customers to obtain funds to improve or expand their homes. These re-advances are less complicated than applying for a new home loan, and funds become immediately available once the customer meets all the requirements. The provision and financing of affordable housing is critical in South Africa, given the shortage of housing in the country.”
The banking group said that many of their customers take out only one affordable housing loan, but a growing subset is also accessing additional funds for home improvements or expansions, indicating that these purchases serve as entry points into the housing market for buyers with bigger aspirations.
Home improvements recently took on a new trend in recent times with many home owners investing in solar panels and back up water supplies for their homes.
While this can add value to properties, the recent spells of load shedding that were implemented led to many people looking to invest in solar panels again.
However, despite the convenience, cost-saving and home upgrading potential that comes with renting or owning solar panels, it also comes with several risks that consumers need to be aware of.
According to Ryno de Kock, Head of Distribution at PSG Insure, insurance cover can provide a buffer against unexpected financial losses caused by the damage, destruction, or theft of solar equipment.
“From an insurer’s point of view, solar panels will qualify as permanent fixtures or fittings to a home. This would mean that the sum insured on your building/homeowners insurance policy will need to be updated accordingly, so that in the event of a claim, the payout will include the replacement or repair cost of the solar panels you have recently installed,” he said.
Related Topics: