The great housing mismatch
In this month’s issue Lightstone data highlights the stark contrasts in South Africa’s residential market. At the bottom end, just one formal home exists for every 4.8 households earning under R13 000 per month – part of an affordable housing shortfall affecting 80% of families. At the top, 75% of Plettenberg Bay’s homes stand above R3m, buoyed by retirees and remote professionals. And a recent Real Estate Investor Magazine Investor Talk with Lightstone’s Chief Analytics Officer Paul-Roux de Kock unpacks key 2025 property trends along with what they mean for buyers and investors alike. Lightstone’s latest HPI is also included.
Affordable housing shortage stymies low-income families
Lightstone’s latest analysis exposes a severe deficit in affordable formal housing. At incomes below R13 000 a month, there is only one registered property for every 4.8 households; even raising the threshold to R26 000 improves availability to just 1 in 3.3. More than 80% of South African households fall beneath this level, forcing many into informal dwellings or distant rentals. Transaction volumes also shrink sharply below the R300 000 band, further constraining mobility and equity, while higher education significantly widens purchasing power.
Read MoreBig prices, tough sales in Plett
Plettenberg Bay has some of the highest property values in the Garden Route, averaging R4.9m, with several homes priced above R10m. Lightstone data shows that sellers often list properties above market expectations, with Plett recording the lowest asking price success rate in the region. While demand from retirees and remote workers seemingly drives pricing, affordability for local workers remains limited, highlighting the need for access to broader housing options.
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Inside the 2025 property market with Paul-Roux de Kock
In a recent REI magazine Investor Talk, Chief Analytics Officer at Lightstone, Paul-Roux de Kock joined Neale Petersen to unpack the 2025 House Price outlook looking at projected growth. The conversation provided a view of the national growth trends, regional performance, and economic factors shaping property buying behaviour. De Kock expects house-price inflation to settle near 2.5 % in the base case, rising to 3.5 % if GDP tops 3 % and the SARB trims the repo rate, or slipping to 1.5 % if growth falters and borrowing costs climb.
Watch the full interview nowLightstone’s latest House Price Index
Lightstone’s latest House Price Index as at end of May 2025 indicates that a national year-on-year inflation has risen slightly from 3.7% in April to 4.1%. The Western Cape, though its growth has flattened, continues to outperform Gauteng and KwaZulu-Natal. Furthermore, the latter two provinces show upward trends. Inflation in the Low-Value segment leads at 7.5%, with Mid-, High-, and Luxury segments following at 3.3%, 4.2%, and 5.7% respectively.
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