As I explore the world of real estate trends in South Africa, one thing stands out: affluent individuals remain steadfast in their pursuit of building their dream homes, even in the face of high interest rates and a challenging buyers’ market. It’s fascinating to see how people earning over R50,000 a month are navigating this terrain, with many either starting from scratch or expanding their existing properties through top-up building loans.
Standard Bank’s data offers an intriguing insight—while building loans have decreased since 2022, the average value of these loans has actually risen. It’s clear that those aged 30 to 50, particularly in Gauteng and the Western Cape, are leading the charge. Both provinces dominate in loan registrations and top-up applications, painting a picture of active investment in bricks and mortar.
Shifting Strategies for Wealth Creation
A striking trend has emerged: the construction of multiple units on a single erf. Some of these properties are rented out without being sectionalised, which avoids additional costs. Toni Anderson, Standard Bank’s Head of Home Services, explained that many owners avoid sectionalising because they aren’t planning to sell.
Another noteworthy development is the rise of multi-tenanted dwellings designed to generate rental income. However, banks are hesitant to lend for such projects due to zoning restrictions and inadequate infrastructure.
I find it fascinating how these approaches reflect a shift in wealth creation strategies. As Chiko Manokore, Standard Bank’s Head of Personal and Private Banking, puts it, many investors are focused on short-term gains, but they might overlook the long-term implications. Building larger homes or multiple units may seem like a sound investment now, but unexpected changes in market conditions or personal circumstances can create challenges later.
Planning Ahead for Success
Manokore emphasises the importance of financial planning, urging investors to think long-term. A clear conversation with a financial planner about assets, liquidity, and goals can be transformative. “A well-designed strategy with a five-, ten-, or twenty-year outlook can help manage future liquidity needs,” he says. This advice resonates deeply with me. Whether it’s through tailored insurance or lending solutions, the goal is to avoid being forced into quick sales that may not align with your financial goals.
The Homestead Legacy
The story of homesteads being built in rural areas like the North West, Limpopo, and the Eastern Cape is one I find particularly moving. Many professionals from urban hubs like Johannesburg or Cape Town are investing in large, multi-generational homes for their families in their home villages.
These properties, often built on communal land or without title deeds, are a testament to the desire to create a lasting legacy. However, the absence of title deeds can lead to complications. As Manokore wisely advises, documenting ownership and intentions in a will is crucial to avoid disputes.
With fewer than 15% of South Africans having a will, according to the Master of the High Court’s 2022 report, it’s clear that planning for the future is not just important—it’s essential. Proper documentation can ensure that wealth is preserved and passed down as intended.
Building Beyond Today
As I reflect on these trends, one thing is certain: the journey of wealth building through real estate is deeply personal. It’s about more than bricks and mortar; it’s about creating security, legacy, and a future for the next generation.
Manokore sums it up perfectly: “Wealth building and preservation require careful planning.” With the right guidance, these investments can become more than just homes—they can become the foundation for enduring prosperity.