At the time of finalising this report, South Africa had just entered Phase 4 of a national lockdown implemented in response to the Covid-19 crisis.

It is critical to recognise the role that housing assets can play in the resilience strategies of lower-income households. Image credit:

It is critical to recognise the role that housing assets can play in the resilience strategies of lower-income households. Image credit:

Together with other non-essential services, the TSC office has been shut for over a month, and only those clients who can be assisted remotely are being serviced.

The Covid-19 crisis is likely to have longer term impact on the TSC and on residential property markets more broadly. With regard to the entry-level housing market and subsidy housing in particular, as government prioritises health expenditure and income support for households affected by the crisis, we may see a reduction in conditional grants to provinces that finance the construction of subsidy houses and reduced allocations for the Finance Linked Individual Subsidy Programme. Funding that is available for human settlements may be directed towards reducing over-crowding and improving access to water and sanitation in informal settlements.

While mortgage lending in lower-income segments has been limited, according to the Banking Association of South Africa (BASA), 102 635 mortgages were granted to the so-called Financial Sector Charter (FSC) target market between Q1 2015 and Q1 2019. These households earn less than R24 300 per month in 2020 rand terms. While little is in the public domain on the nature of employment in these households, it would be safe to assume that many will have suffered income shocks and are unable to service their mortgages. In addition, in recent years, the rental market has become a noticeably vibrant sub-sector in many lower income neighbourhoods. To the extent that renter households suffer longer term income shocks, small-scale landlords too, will suffer. The immediate impact of Covid-19, followed by a prolonged period of no, or very limited economic growth, may dampen demand in entry-level housing markets, and recent increases in property values we have seen in some low-income neighbourhoods may be reversed.

The Transaction Support Centre VIII

In this context, it is critical to recognise the role that housing assets can play in the resilience strategies of lower-income households. Since 1994, the government’s national housing programme has completed an estimated 3.4 million housing units and handed these over to the lowest income families in the nation.

An estimated two million of these houses are formally registered on the deeds registry, and subsidy housing stock now accounts for just under one third of all formally registered residential properties in South Africa. For the households who were fortunate enough to receive a subsidised house, it is probably the most valuable asset they will ever own.

In the context of Covid-19, this asset could provide valuable support to low-income households, improving their resilience and broadening their options for responding to the crisis. It could also be the key to unlocking productivity growth and private investment in a post-Covid-19 economy – something we will very clearly need. Except, in many cases, this value is inaccessible.

Too many housing assets are ‘dead capital’, to use the terminology of Hernando de Soto, the Peruvian economist. The cases documented in this report highlight a number of very significant barriers that impede formal housing market transactions. These barriers have very significant repercussions for property-owning households, for the development trajectories of lower-income neighbourhoods and, by extension, the transformation of South African cities.

A very significant and coordinated effort across government departments is required to address multiple problems that together give rise to this situation. But with responses to the Covid-19 crisis focusing almost exclusively on household risk to infection, rather than household resilience in the face of the pandemic, required changes to the property transfer system and the underlying policies, regulation and processes that support it may be overlooked. That would be a great pity.


  1. CAHF’s Citymark using Deeds Registry data supplied by Lightstone Property. CAHF apply a proxy with a set of rules to identify.
  2. Government-subsidised houses in the Deeds Registry data.
  3. Centre for Affordable Housing Finance, – Transactional Support Centre Report. Extracts from the Foreword of the report.