For individuals with variable income, property investment can be made feasible through structured repayment models that adjust according to the borrower's earnings.
Image: Simphiwe Mbokazi
The door to the property market remains firmly closed for many aspiring homeowners and property entrepreneurs.
This is despite access to property ownership having long been one of the most reliable pathways to wealth creation.
The issue is often a lack of accessible, flexible financing, says Letlatsa Lekhelebana, the client coverage regional manager at TUHF.
He says innovative finance plays a critical role in changing this reality, unlocking participation, and enabling both new entrants and established players to grow.
“At its core, the property market depends on movement. New buyers enter, existing owners trade up, and investors expand portfolios. When this cycle slows, the entire ecosystem becomes constrained,” says Lekhelebana.
The specialised commercial property financing company says recent industry insights, like this whitepaper by Pepper Money, indicate that delays in financing innovation directly limit new entrants, reduce wealth creation, and ultimately lead to a less liquid and less productive market.
It adds that the issue is an economic one, not just a question of home ownership.
For newcomers, Lekhelebana says the biggest barrier is affordability. He says traditional mortgage models assume stable incomes, significant deposits, and predictable financial behaviour.
“But this does not reflect the reality for many South Africans, particularly younger professionals, informal earners, or first-time entrepreneurs. Without alternative pathways into the market, these individuals are locked out before they even begin.”
In January last year, Tsekiso Machike, the spokesperson for the Minister of Human Settlements Thembi Simelane, said the South African human settlements sector faces challenges with the housing accessibility opportunities for the gap market.
He said the gap market pressures are felt more strongly in metropolitan municipalities, intermediate cities, and small towns. All stakeholders in the value chain must find long-lasting solutions to this challenge since the gap market challenges drive the proliferation of informal settlements, he told "Independent Media Property" at the time.
TUHF says this is where innovative finance becomes transformative. The company says solutions such as shared ownership, rent-to-own models, and blended finance structures are essential tools for inclusion.
By lowering upfront costs, spreading risk, and aligning repayment structures with real income patterns, these models create practical entry points into property ownership, it says.
According to the regional manager, for example, equity support mechanisms-where a funder co-invests in a property-can significantly reduce the deposit burden.
He says that similarly structured repayment models that evolve with a borrower’s income can make property investment viable for those with non-linear earnings. “These approaches recognise that affordability is not just about price, but about how payments are structured over time.”
The property financing company says these innovations achieve two things: they help individuals who may be overlooked in traditional financial models, and they strengthen the market itself.
It says that when more people can enter the property market, demand increases, liquidity improves, and confidence grows.
“Existing property owners benefit because there is a larger pool of buyers, making it easier to sell, refinance, or expand. In this way, innovative finance supports both ends of the spectrum: it opens doors for newcomers while enabling established investors to scale.”
However, access alone is not enough, says TUHF. The company says financial literacy plays a crucial role in ensuring that participation is sustainable.
It says the lack of knowledge around credit, risk, and long-term financial planning can lead to defaults, which harm both borrowers and lenders. Poor financial literacy increases the likelihood of financial distress and long-term exclusion from credit markets, it says.
“Innovative financiers recognise this risk and implement measures to support property entrepreneurs’ readiness to enter the market. Pre-purchase education, budgeting tools, and ongoing support are becoming essential components of responsible lending.
"Excellence in this space is no longer measured by the volume of loans issued, but by the long-term success of those loans. Sustainable portfolios are built on informed, prepared borrowers.”
TUHF says for property entrepreneurs, particularly those building portfolios or entering the affordable housing market, this shift presents a significant opportunity. It says innovative finance models can provide access to capital that would otherwise be unavailable, while also offering more flexible terms that support growth.
“For example, public participation opportunities like the government’s First Time Homeowner support programme, where public and private funding are combined, can unlock projects that deliver both financial returns and social impact.”
The commercial property financier says innovative finance solutions should be mindful of the equity gaps that exist for many new property market entrants.
It says subsidy programmes and equity funds, like its Inthuthuko Equity Fund, can help bridge the gap for first-time buyers and emerging investors, reducing risk and encouraging broader participation.
When stakeholders collaborate effectively, the result is a more inclusive and resilient property market, it adds.
According to the NCR’s Consumer Credit Market Report (Q2 June 2025), total outstanding consumer debt in South Africa now stands at approximately R2.44 trillion.
Mortgages make up the largest share at around R1.27 trillion (52%), followed by secured credit such as vehicle finance at R541 billion (22%), credit facilities (credit cards and store accounts) at R349 billion (14%), and unsecured credit at R210 billion (8.6%).
Without innovation, Lekhelebana says the market will struggle to grow, with fewer new entrants and increasing pressure on existing participants. He says younger generations will continue to enter the market later, if at all, while demand stagnates and confidence declines.
“Over time, this could lead to greater reliance on state-supported housing and increased strain on public resources.”
But with the right approach, the regional manager says the opposite is possible. He says a market that embraces innovative finance can become more dynamic, inclusive, and sustainable.
“It can support a new generation of property entrepreneurs-individuals who not only build wealth for themselves but also contribute to addressing broader housing challenges.”
Ultimately, TUHF says opening up the property market is not about lowering standards or increasing risk.
The company says it is about rethinking how risk is shared, how affordability is structured, and how opportunity is distributed.
“Innovative finance is the bridge between potential and participation, and it is one of the most powerful tools we have to build a more accessible and thriving property sector.”
Independent Media Property