Despite Deposit Restrictions, South Africans Continue to Purchase Housing, Demand for Luxury Real Estate Rises

The South African residential property market showed resilience in July as mortgage lending continued, despite higher down payment requirements creating some pressure on applications. Meanwhile, luxury residential complexes in Gauteng and the Western Cape continued to attract high-income buyers.

According to the August BetterBond report, the number of mortgages issued in July increased by 4.1% compared to the previous year and by 28% compared to July 2024. The average property price remained relatively stable: the average price for all buyers was R1.7 million, while the average price paid by first-time homebuyers exceeded R1.4 million, reaching a record high for this category.

In the elite golf club Dainfern in Sandton, the median price rose by 17%, reaching R6.3 million. BetterBond attributed the market support to improved affordability following interest rate cuts that began in late 2024, as well as an increase in average household income, which grew by 14% over the last two years.

The average mortgage for a first-time buyer was R1.2 million, with the required average deposit equivalent to 13.2% of the purchase price. Although average deposits rose again in July, the deposit-to-annual salary ratio remained lower than the previous year, decreasing by 21% from the peak in the fourth quarter of 2022.

BetterBond data indicated that this improvement was not limited to one part of the country. In the elite golf and equestrian complex Blair Atholl in Lanseria, homes were listed from R10 million to R67 million.

Demand for Elite Complexes in Gauteng

At the top end of the market, Seeff Property Group noted growing interest in luxury residential complexes in Gauteng. Seeff pointed out that closed complexes around Johannesburg, Pretoria, and the wider Gauteng region have seen significant growth over the past two decades, with these complexes increasingly dominating the high-end market in terms of average property value, price stability, and buyer demand.

Lightstone data cited by Seeff shows that complexes accounted for 16.7% of total transactions in Gauteng but 28.6% of the total transaction value, which exceeded R35 billion. Properties selling for more than R4 million made up 11.2% of complex transactions compared to 4.14% across the entire Gauteng market.

In Pecanude, waterfront villas are valued between R2.8 million and R25 million. The average transaction in a complex was R2.37 million, approximately 76% higher than the Gauteng average of R1.3 million. Typical homes in elite complexes usually cost between R3 million and R7 million, although individual properties reached significantly higher prices.

Chairman Samuel Seeff stated that the drive to improve security levels and service has led to properties in complexes achieving some of the highest average prices. In the Western Cape, the luxury and hospitality market also attracted attention.

According to Seeff, the Park Avenue Boutique Estate complex in Houghton Bay was listed for sale at R114 million plus VAT. Seeff's real estate specialist in Houghton Bay, Ingred Killa, reported that the property was initially offered off-market before public advertising, noting that its integrated zoning for hotels makes it a rare investment opportunity in an area lacking such zoned properties.

Tourism growth in Cape Town has noticeably intensified, stimulating demand for hotel assets. The complex spans 8,527 square meters and includes a mansion with five suites, four double villas, a treehouse, a spa, a pool, a conservatory, a commercial kitchen, and event facilities. Killa suggested that the property could function as a luxury boutique resort, a corporate retreat, or a wellness center. This hospitality opportunity arises against the backdrop of continued tourism growth in the Western Cape.

According to Seeff, international arrivals in Cape Town increased by 11.1% to 1.5 million in 2025, and tourism spending rose by 15.4% to R26 billion. Regional hotels showed an average occupancy rate of 71%, rising to 80% during peak periods.

Buyer interest increased, particularly for elite family homes in Eagle Canyon due to the picturesque golf course and amenities. BetterBond data also indicated continued national tourism growth: international arrivals to South Africa increased by 5.6% year-on-year in the first six months of 2026. Europe remained the largest source country, followed by North America.

Killa noted that the Houghton Bay property market attracted local, domestic, and international buyers, particularly from Germany and the UK. She added that the average property value in the area has doubled over the last five years, with recent sales conducted by Seeff reaching R40 million and R65 million. However, BetterBond warned that slow growth in approved building plans in major municipalities combined with weak financing for new construction could lead to a future supply shortage.

iol.co.zaAugust 10, 08:00

Rising cost of living forces South Africans to turn to credit more often

Working residents in South Africa are increasingly using personal loans, funds from family and friends, savings groups (stokvels), and informal lenders as utility costs, such as electricity and water, rise faster than the general inflation rate.

Households in South Africa are facing increasing financial pressure due to the rising cost of living, forcing more consumers to rely on borrowed funds to cover expenses. According to Statistics South Africa data for the last month, consumer inflation reached 5% in June, the highest figure since June 2024. Transport costs, housing needs, and utility payments continue to put pressure on household budgets.

This increase comes against a backdrop where many consumers were already struggling with rising monthly expenditures. Furthermore, the latest Cost of Living Report by the Competition Commission showed a significant increase in the prices of essential services over recent years, adding further strain to household finances.

The report noted that electricity prices increased by 85% between 2020 and early 2026, while the cost of water rose by 68% over the same period. Both increases significantly exceed the overall consumer inflation rate, which was 30% during this period.

Commissioner Doris Tsepe stated that 'addressing the cost of living issue requires closer examination of administrative pricing mechanisms and increased transparency.'

The impact of rising expenses is now reflected in personal finances, as consumers increasingly take out loans to manage their monthly spending. The South African Credit Associations warned that not only large borrowers are under pressure.

Overview of the Pressure

Rising living costs are pushing more South Africans towards taking out personal loans, approaching informal lenders, and other forms of borrowing.

Essential Services vs Inflation

The increase in electricity and water prices between 2020 and early 2026 significantly outpaced the overall consumer inflation for that period. Commissioner Doris Tsepe emphasized the need for 'closer examination of administrative pricing mechanisms and increased transparency' to solve the cost of living problem.

Personal loans are becoming more common

The Old Mutual Savings & Investment Monitor report showed that the proportion of working South Africans with any personal loans increased from 54% in 2025 to 64% in 2026. This figure includes informal loans.

Borrowing from mashonisas is rising

The report also raised concerns about the increase in borrowings from informal lenders, such as mashonisas or loan sharks, whose share grew from 12% to 19%.

The Credit Pressure Chain

Factors noted within the credit pressure chain include the 68% rise in water prices, the 5% inflation in June 2026, the 19% share of loans from mashonisas in 2026, and the increase in personal loans.

Key Figures Summary

The problem also lies in the increase in small debt obligations, such as store accounts and personal loans, as households struggle to repay debts. Additionally, the Old Mutual Savings & Investment Monitor report found that consumers are increasingly borrowing money from people they trust, namely family and friends (up 28%, or 10% more), and through savings groups (stokvels) (up 16%, or 5% more).

FNB Consumer Education Manager Pearl Sele cautioned that credit involves costs, including interest and potential additional fees such as administrative, service, and initiation fees. She advised consumers to request a quote before entering into any credit agreement, carefully study the terms of the agreement, and avoid borrowing more than necessary.

Sele also strongly urged consumers not to borrow more than they need and not to overburden themselves with debt, but instead to borrow responsibly.

iol.co.zaAugust 7, 16:52

Mosikili stated that South Africa remains stable despite protests and tensions surrounding illegal immigration

Deputy National Commissioner Lieutenant General Tebello Mosikili assured South African citizens that law and order is being maintained despite recent security issues and protests.

According to the National Joint Operational and Intelligence Structure (NATJOINTS), South Africa is demonstrating stability and adherence to the law following months of demonstrations related to combating illegal immigration.

Tebello Mosikili, who serves as Deputy National Commissioner and Chairperson of NATJOINTS, reported that the country's security forces have maintained stability after nationwide demonstrations held on June 30th.

Mosikili noted: 'I am pleased to report that South Africa remains stable, the law is being upheld, and our security forces continue to provide a safe and secure environment for everyone who lives, works, and visits our country.'

This briefing took place just over a month after the nationwide actions that tested the country's ability to ensure security and coordinated law enforcement response.

According to Mosikili, the operations conducted on June 30th achieved set goals, such as protecting life, property, the economy, and constitutional rights.

She added: 'The country remained functional, critical infrastructure continued to operate, and the vast majority of South Africans carried out their daily activities without interruption.'

Police data indicates that protest activity related to anti-illegal immigration campaigns has significantly decreased since then. In July, authorities recorded 212 public order incidents across the country, including 128 peaceful marches, 70 gatherings, nine disorder incidents requiring police intervention, and five cases of looting. 354 suspects were arrested, and 205 criminal cases were opened.

Mosikili emphasized that while most demonstrations were peaceful, law enforcement will continue to act decisively against criminal behavior. She stated: 'These figures show that while South Africans continue to responsibly exercise their constitutional rights, law enforcement is ready to respond whenever these rights are abused through violence or criminal conduct.'

Furthermore, she cautioned the public against spreading misinformation linking unrelated crimes to anti-illegal immigration campaigns, asking people not to share unverified data.

Mosikili assured citizens that security services remain prepared for upcoming national events, including local government elections and the 46th SADC Summit in Durban.