{"id":91001,"date":"2025-10-04T15:20:59","date_gmt":"2025-10-04T15:20:59","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap"},"modified":"2025-10-04T16:22:18","modified_gmt":"2025-10-04T16:22:18","slug":"south-africans-caught-in-a-property-trap","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap","title":{"rendered":"South Africans caught in a property trap"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>In South Africa, renting is often seen as a financial \u201ctrap\u201d that locks households out of wealth-building opportunities, as rising property prices outpace wages and limit access to capital assets.<\/p>\n

While many South Africans dream of buying a home, renting is considered the cultural norm in other nations. In Germany, for example, even middle-class and wealthy households often choose to rent their homes for life.<\/p>\n

This makes sense because of these countries\u2019 high-quality rental stock, strong tenant protection, and different market structures.<\/p>\n

\u201cBut in South Africa, you really shouldn\u2019t be renting your home, unless there\u2019s a strategic reason behind it,\u201d said Sentinel Homes MD Renier Kriek.<\/p>\n

\u201cRenting tends to be a trap in the South African economy, because you can\u2019t afford not to have exposure to large capital assets such as residential property.\u201d<\/p>\n

In South Africa, renting typically isn\u2019t a lifestyle choice but an affordability or creditworthiness issue. The 2025 Ipsos Housing Monitor found that 89% of renters in the country would like to own their own home.<\/p>\n

While 92% of South Africans believe everyone has a right to own their own home, nearly half struggle with housing costs.<\/p>\n

The lack of affordable housing is enforcing a long-term renting cycle, trapping renters because they can\u2019t afford to buy a home. This is the case even when South Africans\u2019 monthly rent exceeds potential bond repayments.<\/p>\n

Statistics South Africa\u2019s 2024 General Household Survey recorded a drop in homeownership from 64.4% in 2022 to 60.1% in 2024. At the same time, it reported an increase in households that rent, growing from 22.5% to 25.1% during the period.<\/p>\n

Adding to the problem is the fact that, according to Kriek, property prices have outpaced wage increases for the past 70 years.<\/p>\n

\u201cThis is not only a South African phenomenon, but here it has the effect that 80% of South African households are already effectively priced out of the property market. Our housing backlog is around three million formal units,\u201d he said.<\/p>\n

He quoted French economist Thomas Piketty, who said if the real return on capital is higher than GDP growth, those with capital will become richer at a faster rate than those who earn wages.<\/p>\n

Escaping the trap<\/b><\/p>\n

Sentinel Homes managing director Renier Kriek<\/p>\n

To escape the rental trap, Kriek urged renters to explore all possible options to buy property. He stressed that they should start saving early and not overspend on rent.<\/p>\n

Putting down a larger deposit improves someone\u2019s home loan eligibility, as the instalments must stay within 30% to 35% of their gross income. \u201cLet\u2019s say, this qualifies you for a R1 million home loan,\u201d Kriek said.<\/p>\n

\u201cBut if you have saved a R200,000 deposit, you can buy a R1.2 million house.\u201d This should also reduce the buyer\u2019s interest rate, saving them money and increasing their return on the property value.<\/p>\n

A first-time buyer earning R3,500 to R22,000 per month may fit the criteria for the First Home Finance (FHF) Subsidy, formerly FLISP.<\/p>\n

\u201cIt\u2019s a brilliant government scheme that contributes towards buying or building your first home,\u201d Kriek said. \u201cCertain bond originators assist in securing the FHF, which would be the most frictionless way.\u201d<\/p>\n

Many employers also offer housing subsidies, sometimes with favourable loan terms, deposit assistance, or matched subsidies to qualifying employees.<\/p>\n

Kriek stressed that renters should take advantage of any and all of these opportunities for support if they have the option.<\/p>\n

Making homeownership more affordable<\/b><\/p>\n

To make homeownership more affordable, Kriek suggested co-buying. This involves getting a partner \u2013 not necessarily your romantic partner \u2013 to purchase a residential property together.<\/p>\n

Alternatively, Kriek recommended buying a \u201cfixer-upper\u201d house. \u201cYou generally get a larger uptick in value for making the renovations than buying an already renovated property. However, you\u2019ll need cash as home loans don\u2019t cover renovation costs.\u201d<\/p>\n

Another option is buying a house with an income-generating flatlet or garden cottage, which can be rented out.<\/p>\n

The bond originator can include 60% to 70% of the projected rental income in the loan affordability calculation to help secure the loan. The rental income earned goes toward paying down the finance, saving on interest.<\/p>\n

Buyers could also subdivide the property. \u201cMany municipalities recently started to allow the building of more than one house on a single residential erf,\u201d Kriek said.<\/p>\n

That means that if someone buys an older property with a large backyard, they can sell the developable part of it or the right to build there to someone else.<\/p>\n

This enables them to earn an extra income if they cannot afford to build the second or third dwelling themselves.<\/p>\n

\u201cEscaping the rental trap doesn\u2019t necessarily require you to own the house you live in,\u201d Kriek said. \u201cSometimes, this means buying properties that you don\u2019t live in, or buying several smaller properties instead of one expensive one.\u201d<\/p>\n

For example, rentals are generally cheaper than bond interest at the higher end of the property market.<\/p>\n

South Africans in this group might be better served renting and, rather than purchasing the house they live in, buying a less expensive property with a better investment case.<\/p>\n

\u201cOr instead of buying one house for, let\u2019s say, R3 million, you could invest in three duplexes for R1 million each, in different areas, all earning income. This would spread your risk for the same value and provide more diversification benefit,\u201d Kriek explained.<\/p>\n

\u201cThe basic lesson is that if you\u2019re investing in residential property to break free from the rental trap, your decision must be purely financial, not emotional.\u201d<\/p>\n

For More News And Analysis About South-Africa<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. In South Africa, renting is often seen as a financial \u201ctrap\u201d that locks households out of wealth-building opportunities, as rising property prices outpace wages and limit access to capital assets. While many South Africans dream of buying a home, renting is considered the cultural norm in other nations. In Germany, for example, […]<\/p>\n","protected":false},"author":84,"featured_media":91000,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,3],"tags":[275],"class_list":["post-91001","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-community","tag-south-africa-2"],"yoast_head":"\nSouth Africans caught in a property trap - South Africa<\/title>\n<meta name=\"description\" content=\"In South Africa, renting is often seen as a financial \u201ctrap\u201d that locks households out of wealth-building opportunities, ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Africans caught in a property trap\" \/>\n<meta property=\"og:description\" content=\"In South Africa, renting is often seen as a financial \u201ctrap\u201d that locks households out of wealth-building opportunities, ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2025-10-04T15:20:59+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-10-04T16:22:18+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/10\/sm_1759582268.486421.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"675\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"South Africans caught in a property trap\",\"datePublished\":\"2025-10-04T15:20:59+00:00\",\"dateModified\":\"2025-10-04T16:22:18+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap\"},\"wordCount\":926,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/10\/sm_1759582268.486421.jpg\",\"keywords\":[\"South-Africa\"],\"articleSection\":[\"all news\",\"community\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africans-caught-in-a-property-trap\",\"name\":\"South Africans caught in a property trap - 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