South Africa's new housing plans fall 68% in 19 years as Gauteng loses its lead

South Africa's larger municipalities approved plans for 103,925 new homes in 2006 but only 33,060 in 2025, a decline of 68% over 19 years, independent research economist Sandra Gordon said in an analysis of Stats SA building plan data reported by The National.

Gauteng, once the engine of the market, passed plans for 48,658 homes in 2006 and 9,667 in 2025, a fall of 80%, and accounts for more than half of the national decline. The Western Cape is the clear exception, with plans down just 31%, less than half the national drop, lifting its share of new homes planned from 20% to 43%. Gordon said the province now plans almost 50% more homes than Gauteng despite having less than half its population, and that excluding the Western Cape the rest of the country approves less than a quarter as many new homes as it did twenty years ago.

She argued that the 2007/08 global financial crisis did not cause a temporary dip but reset the private housing market to a much lower level, with the post-pandemic interest-rate hiking cycle suppressing activity further. Building plans passed are a leading indicator of what will be built over the following one to three years, and the sustained decline has coincided with steady growth in population and household numbers, including a rise in single-person households.

Affordability is the key constraint and is likely to remain so, Gordon said, adding that the oil price shock is adding to price pressures and putting upward pressure on interest rates worldwide. Lightstone Property data shows buyers aged 35 and younger fell by 58% between 2005 and 2025, from roughly 108,000 to about 45,000 a year, with their share of purchases dropping from 44% to 30%. Under-35s make up 37% of the population but own only 7% of residential properties, which Lightstone attributes to higher house prices, stagnant wages, high living costs and youth unemployment above 40%.

Developers have responded with complexes built for rental, making purpose-built rental, also called build-to-rent or multifamily rental, a growing though still small asset class that attracts institutional investors seeking steady income. The First National Bank said last week that South Africa still faces an estimated affordable housing backlog of 3.4 million homes.

Gordon said there are tentative signs of recovery: residential plans passed in the first eight months of 2026 were 17.4% higher than a year earlier, and although interest rates have been hiked this year they remain 100 basis points below their previous peak, providing some support to housing demand.