South Africa’s property market is ageing, more expensive and increasingly divided between a strongly performing middle to upper end of the market and a constrained affordable segment. The shifts appear structural rather than cyclical, suggesting policy intervention is needed to change the trend.

Lightstone’s analysis of bond financing data confirmed the conventional wisdom of the residential market - bond activity increases as interest rates decline, and rising prices push bond values higher - but it also highlighted continuing shifts in the under-35 market, and financing challenges for the Affordable market, despite a recovery in the proportion of transactions financed through bonds in 2025

South Africa has, in effect, a dual housing finance model, with a formal, mortgage-led, bank-driven system which primarily services a Middle-Upper segment, and an informal and semi-formal system which is evident in the Affordable market, where there is limited mortgage penetration and drivers include cash and social networks.

These micro-markets are important in the South African context for two reasons: firstly, individuals under 35 make up the dominant demographic, accounting for more than 60% of South Africa’s 63 million people. Secondly, most South Africans are either in - or seeking access to - affordable housing.

In general terms, it is a good sign for South Africa’s residential property market if these micro-markets are in good health as they are the gateway for home ownership.

Before assessing the state of play in these micro-markets, let us take a look at the volumes and values of bonded transfers from 2011 to 2025.

Bond market overview: 2011-2025

As expected, the data confirms a correlation between primary bonds issued (for a single property) and interest rates – typically the number of bonds issued increases as the interest rates drop. The number of bonded transfers between 2011 and 2025 has been flat at best, with the last three years (2023-2025) performing least well.

There were encouraging signs in 2025 as bonded transfers increased to 118 000 from a 15-year-low of 110 000 in 2024.

Number of bonded transfers: 2011 – 2025



The next two graphs highlight the incremental yearly growth in the value of primary bonds issued since 2011, up from R800 000 in 2011 to R1.6m in 2025 (not adjusted for inflation).

Average primary bond value: 2011 – 2025

The increased value of primary bonds issued impacted the total value of primary bonds written over the years, and what is noticeable is the spike in the post-Covid years of 2021 and 2022. The total value of bonds written in 2025 was R188.3bn, off the 15-year high of R221.2bn in 2022.

Total primary bond value (in R million): 2011 – 2025



The under-35 market

Buyers under 35 accounted for 31% of the bond value in 2025, down from a peak of around 40% in 2005 before the global financial crisis (GFC) of 2008/9 took its toll on economies, and property markets around the world. After the GFC, mortgage lending fell and never fully recovered in real terms. Even though lending volumes stabilised, the under-35 share of market declined as tighter credit and affordability constraints became more pronounced.

Bond value by age in 2025 (excluding non-person bonds)



While the low proportion of bonded buyers under 35 is a concern, the issue is nuanced. Younger buyers make up a third of transactions and are entering the market later (see graph below). In part, this might suggest later access rather than disengagement, but it remains problematic because delayed homeownership reduces lifetime wealth accumulation and signals structural barriers (income insecurity, high interest rates, unemployment). What is more, however, the flatlining of bonded transfers over 15 years in a market with a growing population suggests something more than delayed access.

Age of buyers



As expected, the middle and senior age bands – 46-55, 56-65 and >65 – account for the largest proportion of secondary bonds and bond switching (see graph below). Buyers under 35 were least active.

Proportion of bond activity which is secondary bonds or switching



Affordable versus Mid-High-level market

FTB transactions fell in both Affordable (which accounts for more than 50% of properties registered at the Deeds Office – see table below) and Middle-Upper level in the five years between 2021 – 2025.

If we look at the graph below, the number of transactions in Affordable FTB fell from 32 000 in 2021 to 22 000 in 2025, a 32% drop. The proportion of bonded transactions, however remained within the 30% - 40% band, and in 2025 was at 38%, which translated into 8 360 units.

The number of transactions in Middle-Upper market FTB also fell, from 77 000 in 2021 to 57 000 sales in 2025, but in percentage terms was slightly less than Affordable FTBs at 26%. The proportion of bonded transactions fell from 2021 to 2024, before jumping to 6% of transactions in 2025, which translated into 38 760 bonded transactions.

Affordable versus Mid/higher bonds: 2021 – 2025

Repeat buyers also declined in both categories, while non-person transactions increased in the Middle-Upper-level category.

The data shows a clear split between Affordable and Middle-Upper. Affordable housing relies more on constrained or informal financing, serves older buyers, and is limited by credit access, while Middle-Upper-level housing is more formal, more mortgage-driven, and faces pressure from interest rates.

Affordable and Mid-Upper-level buyer comparison



Looking ahead

The decline in young, bonded buyers is not uniform. The strongest decline is in Affordable which already had low participation and has worsened because of unemployment and credit marginalisation. The decline is less severe in the middle-class market, where activity is offset to some extent by delayed entry.

But the real issue is not just “fewer young buyers” but that the fastest-growing housing segment (Affordable) is the least financed, and this leads to stunted mortgage market growth, limited wealth creation in lower-income groups, and persistent inequality in asset ownership.

There are several interventions which could help shift this and they include:

  • Title deed formalisation.
  • Alternative credit scoring (informal income recognition).
  • Smaller loan products (micro-mortgages).
  • State guarantees / risk-sharing with banks.
    • Serviced, bankable housing stock (formal developments).