Real estate with purpose: Who are we building for?
Tshepo Mashashane
Executive Head of Strategy and Partnerships at Absa Home Loans
Despite growing skylines and bustling construction, South Africa’s housing market remains inaccessible for millions. Affordability challenges, particularly for first-time buyers, are exacerbated by low economic growth, rising living costs and a critical mismatch between supply and demand, especially in the entry-level and affordable-housing segments.
Operation Vulindlela has identified spatial inequality as a key reform area, aiming to build dynamic, integrated cities by promoting affordable housing. In its 2025–2026 progress report, the joint initiative of the Presidency and National Treasury confirmed ongoing work with the National Department of Human Settlements to redesign the First Home Finance programme and introduce a new demand-side subsidy for affordable rental housing.
The design phase is set for completion by September 2025. Once finalised, the strengthened subsidies will support both rental and ownership, to accelerate housing delivery and attract private-sector investment to the affordable-housing market.
A comprehensive review of legal and regulatory barriers to low-cost property development is also planned, with the goal of unlocking housing opportunities in well-located urban centres.
In a market long defined by exclusion, real transformation will come from rethinking access, not just affordability. This raises the question: who is the residential property market really serving? Beyond bricks and mortar, the sector must be purposeful, inclusive and rooted in human connection. Here are five key reasons homeownership remains a distant dream for many:
1 Housing affordability and market access
For many households, especially those who fall between qualifying for state-subsidised housing and earning enough to access the formal mortgage market, homeownership remains out of reach. Tackling this gap requires systemic partnerships across the housing value chain.
For example, an innovative initiative by developer Cosmopolitan, which bundled two rentable back rooms into their home design. Supported by value chain partners, these homes allow buyers to earn rental income - which banks now consider when assessing affordability and thus unlock finance for many who would otherwise not qualify.
I often say innovation isn’t always about entirely new concepts. Sometimes it’s simply about partners coming together, sharing insights and resources and creating real value for customers.
Beyond traditional mortgages, incremental building using stokvels, pooled family resources, or personal loans is an increasingly vital path to ownership, especially in rural areas
Retailers in the construction sector that support these initiatives help the underserved markets and Absa recognises the need to engage more directly in this space to address growing trends in informal housing.
First-time homebuyers remain the largest and most active segment in South Africa’s residential property market, highlighting the urgent need for improved affordability and broader market access.
This segment plays a critical role in driving financial inclusion, with banks, mortgage originators and developers all needing to respond through targeted consumer education and accessible financial tools.
A growing trend in this segment is the rise of women homebuyers. According to real-estate research group Lightstone’s 2024 data, women now outnumber men as property owners. This trend is reshaping the market and influencing how developers respond to buyer needs. Most first-time home loan applications are from women, which underscores the need for accessible financial products and education tailored to this demographic.
For the industry, this means prioritising education, support and solutions tailored particularly for women and first-time buyers to improve affordability and expand access to secure, inclusive housing.
What is clear is that tackling South Africa’s housing crisis is not just about building more homes. It requires targeted, innovative partnerships, smarter planning and a shift towards affordability, location and dignity.
Solutions must blend public and private efforts, support informal and incremental approaches and prioritise integrated urban development near transport corridors to ensure that more South Africans can access secure, well-located homes.
2 Human-centric innovation
Innovation is reshaping how property is financed, built and sold, but the human element remains important. Human-centric innovation means integrating emotional and cultural intelligence into every step of the customer journey. As artificial intelligence and digital tools become more prevalent, the industry must ensure that people remain at the centre of the experience.
This starts with accessible, clear consumer education. From radio to television, digital platforms to print brochures, the aim is to meet customers where they are and offer information that empowers them to make informed decisions.
Digital tools are a great starting point. Buyers still need support from the industry experts to help interpret and navigate the process.
Practical tools such as affordability calculators and pre-qualification platforms are key innovations that support homebuyers. Within two minutes, customers can gauge what they may qualify for and thus gain the confidence to start their property search. But these tools are most effective when combined with guidance from real people.
Ultimately, human-centric innovation is about balance and using technology to simplify and enhance the process, while maintaining the personal connection that builds trust. By grounding digital progress in strong consumer education and real-life support, the industry can ensure that innovation leads to access and not alienation.
3 The role of financial institutions in driving inclusive growth
Banks play a critical role in building an inclusive housing economy, and in balancing profitability with access and resilience with responsibility. This means developing financial solutions for first-time buyers, existing homeowners, aspiring property investors and property developers.
According to the Absa Homeowner Sentiment Index for the second quarter of 2025, South Africans have confidence in property as a reliable investment and a means of building intergenerational wealth. To unlock this potential, banks must tackle systemic barriers and empower consumers through informed, customer-centric solutions.
The collaboration between banks and government plays a key role in expanding access to homeownership particularly the affordable housing segment of the market. A key example is the banks collaboration with government on First Home Finance, a government subsidy for lower-income buyers. The combination of mortgage loan and First Home Finance continue to unlock homeownership for many South Africans. Through the Banking Association of South Africa, banks often engage with government on policy discussions aimed at driving financial inclusion in the property market.
Partnerships between banks, the government and value chain players are critically important. Only through collaboration can structural challenges be addressed and innovative solutions scaled.
By staying close to customer needs and actively shaping policy, banks are not just financing homes, they are helping to build a more inclusive, resilient housing economy.
4 Market fragmentation and the rise of alternative housing models
South Africa’s housing market is increasingly fragmented. While some wealthier buyers choose between lifestyle estates, micro-apartments and standalone homes, many still share space with extended family or live in informal dwellings. This shifting landscape reflects changing household needs and demands a rethinking of how financial institutions support inclusive growth.
To meet rising demand, future residential developments must prioritise well-located, affordable homes that also foster community. But traditional home loan products alone won’t bridge the gap. It is becoming increasingly urgent to support alternative housing models that better reflect how people live, build and finance homes today.
The incremental-building market (underserved market), where individuals construct homes over time using personal loans and retail credit is a key area for innovation. This model, already supported by some building supply retailers, offers a critical pathway to homeownership for rural and lower-income households typically excluded from formal finance and home loan products.
Financial institutions and their value chain partners must go beyond the conventional market and expand financial inclusion by tailoring solutions to diverse needs. This includes exploring new credit models and extending support to non-traditional buyers to ensure that the dream of homeownership becomes accessible across all segments.
By backing alternative models and adapting to changing demand, banks can drive inclusive growth and help shape a more equitable and responsive housing market.
5 Purpose-led and collaborative futures
South Africa’s housing industry is slowly shifting from a profit-first model to a people-centred, purpose-led approach where collaboration among developers, municipalities, financiers and civil society is driving real impact.
The OECD Economic Surveys: South Africa 2025 recommends prioritising housing near public transport and development corridors, promoting densification and rental housing close to city centres, and reforming restrictive building regulations. These interventions aim to correct the spatial legacy of apartheid, where urban sprawl and long commutes isolate low-income earners, many of whom spend up to 40% of their income on transport.
Purpose-led partnerships are already transforming access. In Cape Town, Prasa’s Goodwood Station development, developed by DCI Community Housing Services and co-funded by SHRA, the Infrastructure Fund and the City, is bringing over 1 000 affordable rental units to a well-connected urban node. It includes a small retail hub and directly supports the municipality’s housing goals.
Similarly, Divercity Urban Property Fund’s investment in well-located precincts like Jewel City in Johannesburg and Barlow Park in Sandton demonstrates how scale and strategic partnerships can drive affordable urban housing.
These examples highlight the power of collaboration across the value chain. From banks to estate agents, mortgage originators to local government, each stakeholder is a key touchpoint in enabling inclusive housing. For institutions like Absa, customer centricity and shared value creation are not just strategic priorities. They are essential to building a more inclusive and sustainable housing future.