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\u201cLightstone defines Affordable property as under R750,000 in value and sub-divides the Affordable price band into three sub-bands: Lower Affordable (values under R250,000), Mid Affordable (R250,000-R500,000) and Upper Affordable (R500,000-R750,000),\u201d said Lightstone’s Hayley Ivins-Downes.<\/p>\n\n\n\n
R9,000 gross salary per month is needed to service an R250,000 bond, R18,000 for an R500,000 bond and R27,000 for an R750,000 bond. <\/p>\n\n\n\n
Lightstone said that around 6 million households in South Africa fall within these income ranges, showing that there is upside potential to meet demand with supply.<\/p>\n\n\n
<\/a>Lightstone\u2019s property bands \u2013 Affordable to Super Luxury<\/strong><\/figcaption><\/figure><\/div>\n\n\n
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The average price paid for properties in the Affordable price band has increased over the past 10 years, from R230,000 in 2014 to R390,000 in 2023.<\/p>\n\n\n
<\/a>Average purchase price and transfer volumes: 2014 \u2013 2023<\/strong><\/figcaption><\/figure><\/div>\n\n\n
\u201cTransfer volumes have fallen from 78,000 in 2014 to 38,000 in 2023, a more significant decline than that seen in the rest of the market,” Ivins-Downes said.<\/p>\n\n\n\n
“While the market overall has declined, the data suggests lower earners are under increasing financial pressure<\/strong> and are participating less actively in the property market.” <\/p>\n\n\n\n In terms of value growth, the Affordable sector is doing quite well, particularly in the low-affordable subband, where growth each year has generally been above 8%.<\/p>\n\n\n \u201cSales data in 2023 highlight that nearly 50,000 transfers took place in the Affordable market, which accounted for a third of all sales.”<\/p>\n\n\n\n “However, as the Affordable market constitutes 50% of registered properties, it does indicate a lower rate of activity in the segment (25% sales from 50% of the market).” <\/p>\n\n\n\n Township sales accounted for just 10,000 transfers, with Sectional Titles accounting for 30% of sales while Freehold accounted for 70%.<\/p>\n\n\n\n Where to buy <\/strong><\/p>\n\n\n\n 52% of South Africa’s formal Affordable market is situated in traditional townships, but the activity ratio for sales as a proportion of stock is highest in the suburbs, particularly in the Sectional Title category.<\/strong><\/p>\n\n\n\n In the suburbs, there are 1.1 million (75%) freehold properties and 300,000 (25%) sectional title properties. <\/p>\n\n\n\n On the other hand, almost all Affordable properties in townships are Freehold. <\/p>\n\n\n\n There are roughly 3,000 developments (Sectional Title or Estates) which contain more than 30 Affordable units, meaning that there are around 200,000 Affordable living units <\/p>\n\n\n\n The rest of the affordable market contains houses in townships or suburbs, with an average value of R520,000. <\/p>\n\n\n\n \u201cHowever, many of these developments are ageing and have, over the years, declined in relative value in areas like Durban and Sunnyside<\/strong>.”<\/p>\n\n\n\n A small proportion of the Affordable developments are new developments, with only 10% of available stock developed in the last five years. <\/p>\n\n\n\n The age distribution of all Affordable properties (not only those in Sectional Schemes and developments) ) is mostly between 25 and 35, and Lightstone said that demonstrates that there has been little relative investment in recent years in this category.<\/p>\n\n\n \u201cThere are developers aiming to address this, giving the start-up youth access to attractive and affordable housing and not limiting them to old neglected stock,\u201d concludes Ivins-Downes. <\/p>\n\n\n\n This could be crucial as people under 30 make up a small share of the property market. <\/p>\n\n\n<\/a>
Affordable price sub-bands: annual growth 2014 \u2013 2023<\/strong><\/figcaption><\/figure><\/div>\n\n<\/a>
Sales in 2023<\/strong><\/figcaption><\/figure><\/div>\n\n\n<\/a>