Like most countries, the South African housing market is shaped by a variety of political, economic, and social factors.
For the last couple of years, the South African housing market has been impacted by quite a few challenges, including the shortage of affordable housing, high levels of financial inequality and a struggling economy. However, beyond all this, there have been some very positive developments within the housing markets in certain areas of the country.
Shortage of affordable housing
South Africa unfortunately has a large informal housing sector, currently more than 20% of the population. The South African government has been implementing various initiatives to address this issue, such as the Breaking New Ground policy, which has the main goal of providing affordable housing to lower-income earners. With little success, housing remains a problem for a big part of South Africa.
Housing Market Growth in South Africa
The current state of the South African Housing Market is not all bad. A real estate market analysis shows an expected growth at a CAGR of greater than 9% during the forecast period of 2022 – 2027.
The new data from Stats SA shows that building plans passed for residential developments in the Western Cape have increased by 22.2% year-on-year to a value of R15.4 billion in 2022. While building plans passed for residential developments in Gauteng have decreased by 13.5% year-on-year.
Despite the lack of demand in some provinces in the country, the market for residential developments in South Africa is moving in a positive direction, showing a year-on-year increase of 4.4% in building plans passed to a value of R46.6 billion in 2022.
While completed projects have increased by 14.4% to a value of R25.9 billion.
Conclusion
With ups and downs in the South African housing market, buyers need to understand where the best places are to buy in South Africa by analyzing trends in certain areas and trying to predict what the future entails when investing in those areas.
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