RDP – Housing Finance in South Africa


South Africa’s residential property market forms the largest component of the South African property market, comprising most of the property assets within the country. By the end of 2017, the South African deeds registry had 7.2 million properties, worth R6.8 trillion (US$472 billion). Of this, about R5.1 trillion (US$354 billion) is in the residential sector, involving approximately 6.37 million registered properties. Just over half (57 percent) of the total formal residential property market is found in the eight metropolitan municipalities.

Today it is a fact, more than 7.6 millions of blacks received already their title deeds – how can they claim they are landless?

Centre for Affordable Housing Finance in Africa (CAHF)



More background about the housing situation in South Africa – specific RDP subsidized housing.   Separate lands and CPAs are also mentioned in various articles on the blog.


Against a backdrop of a sophisticated banking system, South Africa benefits from a well-developed housing finance sector and property market. A majority of the residential property market – 58 percent at the end of 2017 – includes homes valued at less than R600 000 (US$41 695). About a third of the total residential property market are estimated to have been fully-subsidised by the government.

South Africa also benefits from a world-class cadastral system. According to the 2018 World Bank Doing Business Report, South Africa is ranked 107th of 190 countries globally, in terms of how easy it is to register property. It takes 23 days to go through the seven procedures and costs an estimated 7.3 percent of the property value. Yet the registration of title deeds for government-subsidised properties remains a serious challenge which is currently being addressed via a targeted government programme.

Despite well-developed credit markets, access to mortgage finance is largely limited to high income earners and consumer indebtedness continues to be a concern. In 2007, 14.5 percent of households in South Africa had a mortgage, but by 2016, this had declined to 9.7 percent of households. Housing affordability also remains a critical challenge. In 2018, the cheapest, newly built house was estimated at R352 500 (US$24 496). Under these terms, the house would be affordable to only 34.4 percent of urban households. Low household incomes; poor credit records limiting access to finance; rising building costs; and scarcity of affordable, well-located land for human settlements development are all factors which contribute to the affordability challenge.

Government’s primary means of addressing the housing backlog and the housing affordability challenge has been focused on the supply side, providing houses to low income households as part of a comprehensive subsidised programme in which government is the delivery agent. Government interventions include social rental housing and a finance-linked subsidy targeted at the ‘gap’ market—to date, over 2.8 million households have received a state housing subsidy. However the backlog is massive – estimated at between 2.3 million and 3.7 million units – and annual delivery by government is clearly insufficient to meet demand. With a current population of nearly 58 million, it is estimated that 71.3 percent of the South African population will reside in urban areas by 2030.



Previously in 2011

Research launched by FinMark Trust has found that as of September 2010, 1.44 million government-subsidised properties were formally registered on the Deeds Registry.  These comprise 24% of all formally registered residential properties in South Africa.     The study involved an analysis of how subsidised properties were trading formally, on the Deeds Registry, and then a series of household interviews with a small sample of respondents from three settlements.


By matching subsidy applicants with properties, a total of 1.7 million subsidy applicants were identified as property owners of 1.44 million properties.  Half of these properties (49%) were found to be located in the eight metropolitan cities.  The highest number of registrations across the provinces was found in Gauteng (395 765), the Eastern Cape (238 682) and the Western Cape (208 852).

The study found that there is a substantial backlog in title deeds, however.  By September 2010, the National Department of Human Settlements had reported that 2.94 million houses were completed or under construction.  With only 1,44 million formally registered, this implies that over one million subsidy houses have not been registered on the deeds registry.

Since 2004, the number of subsidised houses registered as a proportion of those reported delivered has plummeted, reaching a low of 17% in 2007.  This is a critical asset quality challenge.  Title deeds protect rights to a property and record changes in ownership.  They provide individuals with an address, recognizing the owner as being part of the municipality and enabling the owner to secure finance, or to bequeath the asset to family members.

The failure to provide title deeds means that beneficiaries are being denied a critical point of entry into the formal property market.  Beneficiaries are not able to sell their houses formally and as a result, engage in informal transactions, which ultimately undermine the individual property owners’ tenure security and the integrity of the Deeds Registry in South Africa. 

It appears that the decline in registration is linked to a change in the progress payment regime: in 2004, the requirement that title be transferred before payment was removed.  It is also possible that from the municipality’s side, the urgency for title is reduced in the face of the 8-year sale restriction, which was passed in 2001.  If these houses had been registered, the 2,94m houses would comprise about 39% of the entire residential property market.

The backlog in title deeds notwithstanding, the research found that government subsidised housing is valuable to beneficiaries and is having a profound impact on the growth of local economies and sustainable human settlements across South Africa.  While the financial asset value of the house is overlooked by the majority of households, a significant minority are using their homes to gear finance (120 000 mortgage loans were issued against subsidised housing between 1994 and 2010), and a few (90 858) have even sold their homes and purchased second properties.  Even at these small proportions, the extent of finance mobilized by these assets is not insignificant: subsidised properties have been used to secure roughly R20 billion in mortgage finance.  Slowly the government subsidised housing market is beginning to resemble a normal market.



25 May 2016

OVER 4 000 houses will be built and 4 000 sites serviced in the Nelson Mandela Bay Municipality by March 2017 at a cost of R813 million, says  This also includes paying attention to the so-called “Toilet City” in Khayamnandi where 823 units will be built at a cost of R70 million.   The areas where these houses will be built is Joe Slovo West; Chatty 1060; Soweto-on-Sea; Chatty 491; Khayamnandi; Mandelaville; Ebhongweni; KwaNobuhle area 2, 7, 8, 9 and 10; Walmer Gqeberha Phase 1; Kruisrivier Transit Area; Joe Slovo Uitenhage; Tiryaville; and Missionvale 2 400.


28 November 2011

Amplats (Anglo American Platinum) will build 12 000 houses in North West and 8 000 in Limpopo over the next ten years as part of a campaign Each-One-Settle-One launched by Human Settlements Minister Tokyo Sexwale in September.

Are those employees almost immigrants or citizens?  Some of the mines closed down as well.

“Amplats’ housing business model is based on the premise that employees shall own houses and lessen their reliance or dependency on company provided accommodation both on-mine and off-mine. The main reason of this approach is to encourage and promote home ownership among its employees at all levels,” said Nicolau. For human settlements minister, the campaign is starting to bear fruit. “This is what we had in mind when we thought of the concept of Each One Settle One, that we need each other – corporates and government – and that it is through these partnerships that we can succeed as a country,” said Sexwale.


Monday, November 03, 2008, China, Nanjing. The World Urban Forum (WUF4) has officially opened, under the theme Harmonious Urbanisation – “A challenge of balanced territorial developments”.

The WUF4 is hosted by the United Nation agency, UN Habitat in partnership with the Government of China.

The Director General of Housing, Itumeleng Kotsoane is leading a South African delegation to the Forum consisting of officials from provinces, municipalities, private sector and non governmental organisations.

“Since 1994 we have build more than 2.6 Million houses, providing decent shelter to more than 10 Million poor people. Through the Government housing programme poor people who earn less than R3500.00 per month receive land and a house of 40 sqm for free. We also offer start up subsidy to those who earn between R3500 and R7500.00. We also have a lot to learn on how other countries and cities are responding to the growing challenge of urbanization, many cities are facing the same challenges we have in Johannesburg and Cape Town.



21 November 2017

Since 1994 anc provided accommodation to nine million people by building 2.4 million houses. Not only have we managed to change the lives of these beneficiaries by providing them with security and comfort through these houses we have also managed to ensure that the building of these houses creates jobs to help alleviate poverty and increase the skills uptake and usage of contractors.

Implementation of agreement with SALGA on land:  about 193 predominantly urban municipalities adopted the Moratorium on Land or similar policies that restrict the sale of undeveloped land assets. Further work includes the persuasion of municipalities to refrain from selling off undeveloped land assets. There is progress in restructuring of the NHFC’s into a retail housing finance corporation targeting households with an income that ranges from R1 500 – R15 000 per month.



The goal of upgrading all informal settlements by 2014/15 is aligned to the United Nation’s (UN) millennium development goals (MDGs) to improve the lives of 100 million slum dwellers worldwide.  The plan also aims to change spatial settlement patterns by building spatially economical and socially integrated human settlements. The CHP is being implemented through informal settlement-upgrading pilot projects in each province.

As part of the CHP, government provides a 40-m2 house with two bedrooms; a separate bathroom with a toilet, shower and hand basin; a combined living area and kitchen with wash basin; and a ready-board electrical installation where electricity supply is available in the township, to qualifying households earning less than R3 500 a month.

Progress made during 2011 included:

  • Development on the N2 Gateway Project in the Western Cape being at different stages in each of the project areas. Considerable progress was made in providing bulk infrastructure, constructing houses, installing service connections to individual units and the handover of 7 887 houses by the end of 2011.
  • The Zanemvula Housing Project that entails the upgrading of informal and formal settlements in the Soweto-on-Sea and Veeplaas areas, as well as greenfields housing developments in the areas of Chatty and Joe Slovo West in the Eastern Cape.
  • 4 300 sites and 800 units in Duncan Village in the Eastern Cape.
  • The initiation of the Lerato Park Housing Project in the Northern Cape.
  • 5 500 units in the Khutsong Resettlement Project in Gauteng.
  • Infrastructure and housing in the Klarinet Housing Project in Mpumalanga.
  • The Emnambithi Urban Renewal Project in KwaZulu-Natal.
  • 6 776 units in Grassland in the Free State.
  • 341 units of the Morgan’s Village III Affordable Housing Project in Mitchell’s Plain, Cape Town.
  • The Informal Settlement Upgrade Programme in Nelson Mandela, Joe Slovo, Phola Park and Chris Hani informal settlements and Ngangelizwe in the Eastern Cape. Phase One of this project will focus on the provision of interim services and planning for 6 600 units.
  • Agreement to unblock eight housing development projects valued at over R85,7 million was reached between the North West Provincial Government and the Mahikeng Local Municipality for the construction of 2 481 housing units, including the building of 200 rental housing units.
  • In total, 26 328 housing units have been completed, benefiting some 118 476 individuals in the Mabaso RHP, in KwaZulu-Natal.
  • A housing project in Qolweni, Gaatjie, Bossiesgif and Pinetree in the southern Cape created denser settlement for people in the area. The high-density units are the first of their kind in the southern Cape. Higher-density settlements fulfil one of the department’s strategic objectives of maximum use of resources and are important in creating integrated and sustainable settlements. The project will be developed in four phases, with Phase One (265 units) already completed. On completion it will consist of 1 420 units.
  • Several mixed housing projects such as Lehae, Olieventhoutbosch, Lufhereng, Cosmos City, Chief Mogale and Chief Albert Luthuli, to relocate people from informal settlements, are being built in Gauteng.


4 gedagtes oor “RDP – Housing Finance in South Africa”

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