Young South Africans face challenges in home ownership as demand outstrips supply

While housing demand exceeds supply, under 35-year-olds are struggling to afford home ownership, according to SA Corporate Real Estate, South Afruica's biggest residential landlord.

Some startling information about how difficult home ownership has become for younger people was provided by SA Corporate Real Estate’s CEO Rory Mackey in the group’s 2025 financial presentation, wherein he cited a range of data sources that showed that younger home buyers are now renting for longer before buying their first home.

Under 35s also want rent mobility. The result is that the first-time buyer age has risen to 37 from 33 as costs outpace salaries, he said.

The average age of the first affordable residential property purchases increased to 44 in 2025, from 35 in 2015.

Some 40% of new home loan enquiries come from under 35-year-olds, but few are able to turn those enquiries into actual purchases.

This is not a trend only in South Africa, as property data shows that buyers are entering the market later in many developing and developed markets around the world.

For instance, the average homebuyer age in the US has increased to 40, from 33, five years ago.

Meanwhile, an indication of sluggish new residential building supply coming to the market can be gleaned from the fact that non-subsidy and subsidy National Home Builders Registration Council in South Africa (NBHRC) enrolments are 21% and 29% below pre-Covid levels respectively.

The group’s residential portfolio currently consists of 15,600 apartments split between 65% suburban and 35% inner city, differentiated in the market with amenity-rich suburban estates and inner-city precincts seeking to ensure a safe and secure quality lifestyle.

The JSE-listed group that owns about R20 billion of residential, industrial, and retail buildings in South Africa, with a secondary node in Zambia, intends to pay out a final dividend of 13.54 cents per share for the year to December 31, which is about 7.6% higher than last year.

“Whilst recent geopolitical events have negatively impacted emerging markets, the structural improvements that began to support South Africa’s operating environment prior to these events remain intact. SA Corporate is not repositioning itself for this opportunity; it is anticipating it,” Mackey said.

The group is focused on defensive South African property classes: non-discretionary convenience-oriented retail embedded in neighbourhoods, logistics in established high-demand strategic locations, no office exposure, other than that occupied by the group, and multi-family residential leveraging off urbanisation and offering a safe and amenity-rich lifestyle.

The last remaining office property, other than that which houses the group, was contracted for sale. 

In Zambia, the group has 157,000 square metres of gross lettable area, 80% of which is retail. The World Bank has forecast the Zambian consumer will spend 6.4% more in 2026 and 6.5% more in 2027, with the Zambian economy having improved considerably. A high double-digit increase in distributable income was forecast for 2026 from the group’s Zambia interests.

The Public Investment Corporation is the biggest shareholder SA Corporate Real Estate, with an 18,08% shareholding, Emira Property Fund holds 8,74%, while the Eskom Pension & Provident Fund owns a 5,47% stake.

In terms of the group’s R2,92bn revenue from South Africa last year, R2,27bn was generated from properties in Gauteng, R604,59 million in KwaZulu-Natal, R20,11m in the Eastern Cape, and R30,24m elsewhere.

A further R361,8m of disposals are anticipated to be contracted in 2026. Proceeds from these disposals are expected to be applied, in part, towards the repayment of short-term borrowings.

During 2025, the group repaid R920,2m of maturing debt facilities. 

The group has a net debt funding target of less than 40%, and at December 31, 2025, the debt ratio was 42.1, but various activities are underway to deleverage.

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