Pretoria: The Western Cape Department of Environmental Affairs and Development Planning, in collaboration with the Department of Infrastructure, has completed the second round of housing market studies across seven municipalities. The Western Cape MEC for Local Government, Environmental Affairs and Development Planning, Anton Bredell, stated that this initiative is part of the provincial government’s ongoing efforts to better understand the dynamics of the local housing market.
According to South African Government News Agency, the goal is to promote well-located, affordable housing opportunities and support the development of municipal inclusionary housing policies where appropriate. The municipalities included in this latest phase are Swartland, Saldanha Bay, Overstrand, Breede Valley, Bitou, Knysna, and Oudtshoorn. The studies provide critical insight into how local housing markets function, highlighting trends in supply and demand, affordability challenges, and opportunities for both private and public sector investment.
The housing market studies also build on the first round of research completed for Drakenstein, Stellenbosch, George, and Mossel Bay. Based on recent findings, Stellenbosch Municipality has developed and begun implementing its Inclusionary Zoning Policy in targeted areas, aiming to increase the supply of affordable and well-located housing opportunities. The second round of the study has identified several common challenges faced by municipalities, emphasising the need for targeted, evidence-based interventions to improve housing affordability and the overall functionality of the market.
The study has revealed that widespread affordability constraints are restricting access to formal housing, particularly for lower-income households. In these segments, the demand for housing significantly exceeds the supply, mainly due to affordability challenges. In addition, there is a substantial undersupply of entry-level housing (priced up to R300 000) and affordable housing (priced between R300 000 and R600 000). ‘There is limited formal housing available for households that can afford or qualify within this price range,’ Bredell said.
Meanwhile, the conventional housing market segment (priced between R600 000 and R900 000) is also experiencing significant shortages, with the number of potential buyers or households vastly exceeding the available housing stock. In contrast, the high-end housing market (priced between R900 000 and R1.2 million) and the luxury market (priced above R1.2 million) are generally well supplied, featuring a higher share of both existing stock and new market-driven development activities.
‘The imbalance in the housing market, characterised by a shortage of affordable options in the lower and middle segments and an oversupply in the upper-end market, is leading to a rise in informal housing and backyard dwellings. As households struggle to access formal housing, they are compelled to seek alternative shelter solutions. It is also worth noting that the studies primarily reflect trends within the formal housing market,’ said Bredell.
As such, the study found that informal settlements, backyard dwellings, and subsidised units without title deeds are underrepresented. ‘This suggests that the true scale of housing need, especially among the lowest income groups, is likely even greater than reflected in the data.’ The Western Cape MEC for Infrastructure, Tertuis Simmers, emphasised that these studies are pivotal in giving us the intelligence to invest smarter, plan better, and partner more effectively to deliver affordable housing where it’s needed most.
‘The housing crisis is not just about quantity, it’s about access, location, and dignity, and this data helps us respond in ways that are practical, targeted, and inclusive,’ Simmers said. In addition, Bredell believes that the insights from the housing market studies will assist municipalities in developing appropriate responses to housing affordability challenges. ‘This may include developing an Inclusionary Housing Policy, Affordable Housing Strategy, refining the Municipal Spatial Development Framework, Integrated Development Plan, and Human Settlements Plan, while also exploring innovative approaches beyond traditional state-subsidised housing delivery that enable the delivery of affordable housing,’ Bredell added.
The provincial government said the final phase of the project, scheduled for 2025/26, will revisit and update the original four municipal studies that were undertaken in the first round. ‘It will also include a knowledge-sharing workshop and the publication of a consolidated comparative report. This report will identify key trends, highlight regional differences, and outline strategic interventions to enhance housing market performance across the province.’