Affordable housing in South Africa refers to housing that is considered economically accessible for individuals and families whose household income falls at or below specific ranges, as evaluated by either national or local government authorities. The term is used in various ways depending on the region and level of government, but generally refers to housing catering to low to moderate income households.

At the national level, affordable housing is available to households earning within a certain income range. As of 2025, this is between R1,850 and R22,000 per month. This equates to a range from around half the national median salary, to just below the national average salary.

Metropolitan municipalities (the country's largest cities) have their own ways of using the term. For example, in Cape Town, affordable housing is defined as residences catering to households earning an income of below R32,000 per month, which is slightly above the national average salary. For context, as of 2025, the national median salary is R5,400, and the national average salary is R29,290.

In the context of new builds (a key part of tackling a lack of affordable housing), affordable housing may refer to units priced a certain percentage below average market rates for similar homes. South Africa has a robust state-funded housing system that provides a mix of subsidized housing (free homes for low income earners), social housing (reduced cost rentals for low income earners), and other programs. The country has affordable housing programs driven by initiatives at the national, provincial, and local government levels.

Statistics

According to the 2022 Census, conducted by Stats SA, South Africa has a population of 62 million people living in 17.8 million households. The country's average household size has continued to decrease, with the national average being 3.5 persons per household in 2022.

The number of households living in formal dwellings has increased from 65.1% in 1996 to 88.5% in 2022, while the percentage of households living in informal dwellings has halved, from 16.2% in 1996 to 8.1% in 2022. Nationally, nearly a third (30%) of households live in government-subsidized housing.

Between 1994 and 2022, the human settlements sector has delivered over 3.4 million stand-alone houses and multi-story units. Provinces and municipalities have further provided almost 1.3 million homes.

The Department of Human Settlements (DHS) has an annual budget of R33 billion, and builds around 30,000 affordable homes a year.

Locations for cheaper housing

Gqeberha is cited as an ideal city for more affordable housing options, with property priced at an average of R1.1 million, as of 2019. Cape Town, in contrast, is South Africa's most expensive city for housing (both to purchase and to rent). According to Lightstone data, 31.1% of SA's affordable housing market is situated in Gauteng, while 13% is in the Western Cape, and 12% is in KwaZulu-Natal.

Buying a home in South Africa is still cheaper long-term than renting. Historically, many buyers have sought out homes close to major economic hubs, within cities (such as Cape Town CBD and Sandton. This was necessary due to proximity to offices, with traffic being determined by distance to the workplace. Fortunately, in recent years, across South Africa, more affordable housing located in less developed areas has become far more viable thanks to the proliferation of fully-remote work. This has also benefitted businesses in that they don't need to maintain the cost of having offices.

100% home loans

A 100% home loan is an option available to first-time buyers. It removes the requirement normally in place for a deposit (down payment), which is a significant barrier to entry for first-time home buyers with low incomes.

While not a formal program, competition between major financial institutions has resulted in an increasing number of 100% home loans being granted in recent years. Determining factors for approval include credit score and salary (ability to pay back the loan). A minimum credit score of 610 is required for approval of a 100% home loan, and a score of 661+ is considered good.

South Africa uses a mix of credit bureaus, who each maintain scores according to their own internal rating systems. Bureaus include Experian and TransUnion.

National government initiatives

In 1994, after the end of apartheid, the then-new Department of Housing aimed to provide a million public houses over proceeding five years.

The social democratic ANC government of South Africa's first President, Nelson Mandela, implemented the Reconstruction and Development Programme (RDP), a socio-economic policy, which oversaw many major advances in dealing with South Africa's most severe social problems, including those of inadequate and improper housing (created by the apartheid regime's urban apartheid system, including actions taken under the Group Areas Act.

Subsidized Housing

Subsidized Housing is a program that enables a beneficiary to acquire a house that is built and provided by the government, through a government subsidy. These homes are now called BNG houses, but they are still commonly referred to as "RDP Houses".

The term should not be confused with other programs, where a contribution (subsidy) is provided for low income earners to purchase their first home, such as the FHFSA. The Subsidized Housing program provides free (100% subsidized) houses to those who qualify.

The South African government still provides free homes under its Subsidized Housing program. In order to qualify, an individual should:

Be a South African citizen Be contractually capable Habitually cohabit with a partner, be married, be single and have financial dependents, or be a single military veterans without financial dependents Earn less than R3500.01 per month, per household Be a first time government subsidy recipient Be a first time home owner

Applicants can take IDs, birth certificates, and proof of income (if they work) to their Provincial Department of Human Settlements or their Local Municipality, and submit an application for a subsidized house.

The waiting period is usually 2 years, and housing development generally takes place within a planned and prioritized process, where the local conditions dictate which areas should receive assistance first.

These government houses are illegal to sell within the first 8 years of residency. The only exception within this period is when a beneficiary sells the property to the relevant Provincial Department of Human Settlements. This type of voluntary sale occurs when a beneficiary, for whatever reason, chooses not keep the subsidy house.

When their new home is complete, the beneficiary will be registered on the government housing database. When they receive their house, they sign a "Happy Letter". They receive their Title Deeds after 8 years. The entire process is free.

Social Housing

Social Housing in South Africa refers to reduced cost rentals provided to low income earners.

Through the mandate given to the Social Housing Regulatory Authority (SHRA), an agency of the Department of Human Settlements, affordable rental housing is provided in strategic areas. The SHRA also enables municipalities to deliver social housing, and regulates the social housing sector.

FHFSA

The First Home Finance & Subsidy Assistance (FHFSA) program, formerly known as FLISP, is a program facilitated by the Department of Human Settlements and the National Housing Finance Corporation (NHFC) that subsidizes houses for first-time home buyers earning between R3,501 and R22,000 per month. In other words, this program is available to those earning in a range beginning at just above the cut-off to qualify for the national government's Subsidized Housing (free homes) program.

As of October 2025, First Home Finance (FHF) subsidies range from R38,911 to R169,265, depending on a person's income. The FHFSA website maintains a subsidy calculator for prospective applicants. The subsidy can be paid into a home loan, or used as a deposit. Banks are more likely to grant home loans to low-income buyers bolstered by the FHFSA program.

Provincial government initiatives

The Western Cape, where Cape Town is the capital, is the only province in South Africa to have published Inclusionary Housing Policy Framework to facilitate affordable housing in high-valued areas within its municipalities. The draft framework was published in 2021, and opened for public comment. It was aimed at assisting with housing for households earning up to R22,000 per month - below the national average income.

Municipalities, with the guidance of the province where needed, are expected to perform a Housing Market Study to determine whether people in their jurisdiction can afford to live there, and what the housing gap is - the difference between what an average household can afford, and the average price of a house. Municipalities define certain areas as appropriate for inclusionary housing.

After this, municipalities develop inclusionary housing policies to prescribe how big a development must be before it requires inclusionary housing, and the proportion of such housing required in the development. Developers are expected to include some units at lower-than-market rates, or support the city's broader inclusionary housing financially.

In essence, inclusionary housing policy compels large residential developments in well-located (desirable) areas to include sub-market-rate units, either for sale or for rent. Developers are able to make one of three choices to satisfy the requirement:

Include a satisfactory percentage of below-market units within the actual development Build the amount of housing in a separate development, on other desirable land in the area Make in lieu payments to the municipality, which then ringfences the funds for other inclusionary housing. In lieu rates may be set higher than in kind rates, to deter developers from choosing this option.

Inclusionary housing can be sold or rented, as per the developer's preference. Rentals should be within the affordability threshold, and tenants are be subject to income checks. Sales should remain below-market over the long term, and should not be resold on the open market.

Incentives

Beyond mandating developers to include affordable housing, the municipalities provide them with various incentives for doing so. These include additional land use rights, such as being able to build more densely or include mixed-use units. Other incentives include reduced planning or parking requirements.

Cape Town context

As of 2026, Cape Town's gap households comprise 73% of the population, but only 18% of residential properties are in the gap housing segment, which relates to homes priced under R600,000. While salaries in Cape Town are generally higher than in other metros, the average home price in the city in 2026 was approximately R2.5 million.

Local government initiatives

Cape Town

Cape Town, the capital of the Western Cape province, has and continues to build more affordable housing units than any other South African metro, by a significant margin. This, despite Cape Town not being the largest city in South Africa by population. During the period 1994 through 2025, the City of Cape Town constructed a total of 202,070 affordable housing units.

In February 2026, it was reported that during the preceding five years, Cape Town had handed over a total of 12,401 affordable houses (equating to 2,480 per year). This was more affordable homes than the next two largest metros combined, and 152% more affordable homes than Johannesburg (a significantly larger city by population) handed over during the same period.

Affordable housing development

Cape Town defines affordable housing as residences catering to households earning an income of below R32,000 per month. The city has 3 categories of affordable housing: