The Affordable Housing Crisis: A Barrier for Low Income Families in South Africa

The Affordable Housing Crisis: A Barrier for Low Income Families in South Africa

June 2025

Low income households in South Africa are grappling with a severe shortage of formal housing. Data from Lightstone reveals a staggering ratio of 4.8 households for every available property for those earning under R13,000 a month. This situation improves slightly for households earning up to R26,000, with a ratio of 3.3 households per property, but remains dire when considering that over 80% of South African households earn less than this threshold.

The lack of affordable housing forces many families into backyard rentals, informal structures, or unregistered dwellings, often located far from their workplaces. As property values rise, it is the lower income workers who face the greatest difficulties in finding suitable accommodation.

Household Income Insights:

With nearly 12 million households earning below R13,000 per month, there are only about 2.5 million properties available if families aim to spend no more than a third of their income on housing. This represents a significant mismatch, creating a pronounced gap in affordable housing options.

For households earning between R13,000 and R26,000, there are approximately 1.8 million properties available, translating to a ratio of 1.3 households per property. Interestingly, for those earning between R26,000 and R40,000, there are more properties available than households.

Transaction Trends:

Among homes valued under R300,000, 80% of which are subsidized, only 1% have been bought or sold in the last five years. In contrast, 4% of properties in the R300,000 to R500,000 range have been transacted, with 6% for the R500,000 to R750,000 range and 13% for properties priced between R750,000 and R2 million. This data highlights not only the shortage of affordable housing but also the limited transactions among lower income earners, which hampers mobility and economic participation.

Education and Income Correlation:

Interestingly, education levels strongly correlate with housing affordability. Households with more education are more likely to afford homes in higher price ranges. For instance, a couple without matric may afford a home valued at R250,000, but this increases to R380,000 with matric and can reach R1.8 million with degrees.

Mapping these scenarios reveals stark contrasts in housing choices based on education. In Johannesburg, couples without matric may find affordable options in areas like Hillbrow and Orange Farm, while those with degrees are more likely to purchase homes in suburbs like Morningside and North Riding.

As we navigate these challenges, it's crucial to advocate for sustainable solutions that bridge the gap in affordable housing and promote equitable access for all South Africans.