South Africans should be very concerned about what failing and under-maintained urban infrastructure says about our housing market. Rapid urbanisation is leading to the growth of informal settlements, particularly on the outskirts of major cities and even minor towns. As these sprawl, the strain on existing infrastructure and failure to build new infrastructure put pressure on property purchase decisions, affordability, and accessibility.
The concerns are valid and varied: the ‘dumping’ of rubbish into sewage drains and along roadsides, raising environmental and health concerns; the need to increase security to levels higher than most can afford; potholes that aren’t adequately repaired and that collapse over and over, and road surface degradation; traffic lights that are out of service for more than a year; etc. This list is endless.
These are not just challenges facing suburban residents but also the informal settlement communities, many of whom are dignified humans who are largely ignored by the authorities that are not efficiently and effectively addressing the supply of basic needs. This is despite the illegality of informal settlements, and regardless of what one may think, their makeshift shacks are, in their minds, a home, whether temporary or permanent.
Before municipalities can address the need for some 2.2 million affordable properties across the country, local authorities first have to overcome their struggle with a lack of funds, resources, and skills to supply services. Professor Francois Viruly of the University of Cape Town, who has many research interests in property, including Urban Land Economics, confirms that municipalities are dealing with the need to urgently address spatial inequalities, high levels of urbanisation, and issues that relate to housing affordability.
“At the same time they are dealing with a tightening fiscal environment and pressures relating to a stagnant rate base. The answer largely lies in ensuring that existing infrastructure is used as efficiently as possible, which invariably means supporting higher densities in areas where infrastructure is available. Other opportunities lie in the release of well-located land for property development, with local government playing an active role in de-risking projects.”
Currently, housing delivery is in the lower segment of the market: a 40 sqm house, 40 kms from a place of work, with 40% of household income spent on transport. “However, in recent years developments have taken place at an increasing distance from CBDs and places of work,” says the Prof. “This has been influenced by land availability and a fixation on delivering houses no matter where they are located.”
Professor Viruly highlights that land at the extremities of cities requires a considerable amount of infrastructure expenditure, particularly the development of transport routes. Informal settlements' encroachment closer to places of work and suburbs is built out of the need to reduce transport expenditure, freeing up more funds to cater to the cost-of-living necessities.
This requires a major shift in how we think about and respond to the need for more affordable housing and how it defines our property market. Viruly makes the point that “what we call the informal and affordable housing market is not a sub-market, but THE South African property market. Data suggests that close to half of all the properties on the SA title deeds registry are valued at below R750 000, which is some 70% below the R1.2 million mark.”
“At the moment our planning and related policies largely respond to the top 30% of the market and the existing urban environment that serves these markets. Altering spatial inequality in this country would require ensuring that policies start responding to the urban needs of most South African households, including micro-developers and other stakeholders that serve these markets.”
Theo Mseka, Private Property CEO, concurs with Viruly. “At Private Property, we recognise that the future of South Africa’s property market is intrinsically tied to the informal and affordable housing segment, and we are committed to ensuring that this crucial sector is represented meaningfully on our platform.
“From increasing affordable housing listings to driving targeted traffic and engagement, we’re working hard to ensure our platform serves all South Africans, regardless of income level. This includes building strong partnerships with developers, banks, and startups that service this market to expand our footprint in underserved areas.
“We are also exploring innovative tools and services to help consumers in the affordable housing segment to make better, more informed decisions whether they are renting, buying, or investing. We believe technology can be a powerful enabler in closing the gap between supply and demand in this space.
“Our mission is clear,” says Mseka. “Private Property is a platform that empowers every South African to find a home or their space, and that starts with meeting the real needs of the majority.”
One bank that is improving access to affordable housing for low- to middle-income South Africans, amid rising property prices and economic challenges, is FNB. The bank approved R3.3 billion in affordable housing home loans over the last 12 months, putting close to 6,000 families earning less than R34,000 into homes. It has also supported customers with an integrated Financial Linked Individual Subsidy Programme (FLISP) process, helping customers with R72 million in government subsidies. These were advances made to customers earning between R3,501 and R22,000 per month, by advancing nearly R900 million in home loans between July 2024 and June 2025, helping more South Africans achieve home ownership.
FNB's affordable housing portfolio now stands at R23.2 billion as of June 2025. “In a country facing serious socio-economic challenges and a shortage of affordable housing, it’s humbling to know that our innovative solutions are helping thousands of families find dignity, pride, and shelter,” says Lytania Johnson, CEO of FNB Personal Segment. “Owning a home is the foundation of better living standards and financial security. It creates generational wealth and remains the single biggest investment many families will make. Even with the rising cost of living, we know that our customers are determined to achieve lifelong goals such as homeownership … a milestone that helps build a lasting family legacy.”
