The affordable housing micro-markets are critical to South Africa’s future growth and stability.
South Africa’s property market is ageing, more expensive and increasingly divided between a strongly performing middle to upper end of the market and a constrained affordable segment.
The shifts appear structural rather than cyclical, suggesting policy intervention is needed to change the trend.
“South Africa operates within a dual housing finance landscape - a formal, mortgage-led banking system that predominantly serves the middle- to upper-income market, and an informal or semi-formal housing economy within the affordable segment, where mortgage penetration remains limited and access to housing is often driven by cash transactions, family structures, and community-based social networks,” says Hayley Ivins-Downes, managing executive Real Estate at Lightstone.
Lightstone’s analysis of bond financing data confirmed the conventional wisdom of the residential market - bond activity increases as interest rates decline, and rising prices push bond values higher - but it also highlighted continuing shifts in the under-35 market, and financing challenges for the Affordable market, despite a recovery in the proportion of transactions financed through bonds in 2025.
