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IOL News
4 days ago
- Business
- IOL News
Young women struggle with property credit access: understanding the challenges
Women have disproportionately lower access to credit for purchasing property, particularly home loans, despite secured credit making up a large portion of total outstanding debt. They contend with the general struggles of youth in the credit market, combined with the existing gender disparities in secured lending, says Jaco van Jaarsveldt, the Head of Commercial Strategy & Innovation at Experian said in response to an "Independent Media Property" enquiry. 'This likely means they fare worse than both young men and older women in property purchasing credit. This impacts the local economy by delaying household formation and consumption, reducing investment in local communities and stifling entrepreneurship due to a lack of collateral. "Furthermore, it could lead to a brain drain, if talented young women seek opportunities elsewhere, impacting the local talent pool and economic dynamism,' Van Jaarsveldt said. The business services company said women have disproportionately lower access to credit for purchasing property, particularly home loans, despite secured credit making up a large portion of total outstanding debt. It said that while their representation in home loans has seen a meaningful increase over the last five years (from 36.2% to 38%), it still lags behind their male counterparts. 'This is problematic as property ownership is a key pathway to wealth creation, financial stability, and economic empowerment, including serving as collateral for business ventures. Limiting this access for women restricts their ability to build equity and has broader societal implications.' Experian's Q1 2025 CDI reveals a nuanced picture of women's access to credit in South Africa. The company said that while women comprise slightly over half of the adult population, they remain underrepresented in the credit economy from an exposure perspective. In June 2025, women were associated with only R0.61 trillion (approximately 26%) of the total R2.31 trillion in outstanding debt. It said this indicates that while many women are credit active, the volume of credit they access is disproportionately lower than their male counterparts. Compared to the previous year (2024), the report notes a significant positive shift. In 2024, for the first time, the Composite CDI for women exceeded that of the total market, indicating increased financial stress. However, in 2025, women's CDI improved and once again sits below the total market CDI. 'This signals a return to more stable repayment behaviour and reflects women's resilience in adapting to the evolving credit landscape. Compared to the previous 5 and 10 years, women's exposure to credit (from a consumer volume perspective) has shown a slight increase over the last 5 years. "This positive trend is observed across most individual credit products, except for personal loans, where women have seen a slight reduction in representation.'
IOL News
06-08-2025
- Business
- IOL News
Unlocking opportunities: how shared property models are transforming South Africa's real estate landscape
A shared property deal by two couples has landed them this deluxe Camps Bay property, which they will use as a holiday home. Image: Supplied / Law Real Estate More and more people are turning to shared property models that are unlocking new opportunities for South Africans to get into the property market, secure decent accommodation or even make a dream lifestyle become a reality. In the ever-evolving residential property market, agents are witnessing an upswing in deals being penned between friends, relatives or fellow investors that open doors to property investment and long-term asset growth. It also opens doors to those wanting to improve their lifestyle by co-leasing properties they would otherwise not be able to afford on their own - a scenario that affects virtually everyone. Whether it's friends renting together, siblings buying an investment property or digital nomads sharing space, shared property deals in urban settings have increased in popularity over the years. Lifestyle investing "Independent Media Property" spoke to Warrick Wiegand of Law Real Estate, who shared that he's just concluded a sale involving two Durban couples who've pooled their financial resources to buy a luxury home in Camps Bay in Cape Town for R27.5 million. "They plan on using it as a holiday home, with days marked off for each family in the course of the year. For the rest of the year, it will be let out as Airbnb, with both families splitting these costs and incomes," he said. The five-bedroomed home has sweeping views of the Atlantic and Lion's Head. Image: Supplied / Law Ral Estate Changing lifestyles, pressures on households to make ends meet, and the prospect of becoming a property owner have all contributed to increased demand for shared property models, says Grant Smee, CEO of Only Realty Property Group. He believes this new trend is set to shape the future of real estate. 'Ultimately, these shared models allow more people to participate in the property market, but they must be approached with proper planning, transparency and legal safeguards to protect all parties involved.' He says the trend cuts across all age groups, from young professionals to seasoned investors. Co-investing Two such young investors are Rowan Chetty and his twin brother, Ricky*, 27, who made the bold move at the beginning of the year to invest together while they were still relatively young. Born and raised in Verulam on the KwaZulu-Natal north coast, they'd both moved to Johannesburg, where they work in IT. "We decided one day to invest together after a discussion about how going solo is more difficult and challenging. We then chatted to a few experts and decided that a joint investment was more feasible. "We got a joint bond for an apartment in Greenstone, which is made up of young, dynamic people breaking into the corporate world, with property prices going up in the area," Chetty said, adding that they live there and have friends and family living in the suburb. They have a paying tenant with a lease agreement that suits both parties. Before taking the plunge to rent a luxury home together, experts suggest a few key steps that need to be followed. Image: Pexels Co-investing allows buyers to share the capital and returns of property ownership, with collective buying in South Africa allowing for up to 12 applicants on a single home loan by some financial institutions. Mfundo Mabaso, FNB product head of Home and Structured Lending, said this solution is designed to help South Africans enter the property market and gain both affordability and access to larger home loans on more flexible terms by enabling them to combine incomes and deposits. 'FNB's Collective Buying is a home loan solution that enables up to 12 individuals to jointly apply for a single bond. "This way of investing in property comes with some benefits that a group of individuals can enjoy. Whether they are first-time buyers who want to occupy the property or buy as an investment, this home loan solution caters to those needs. "Strategically, this solution responds to a few important realities: property prices in South Africa continue to outpace income growth for many first-time buyers, and younger or lower-income customers are increasingly looking for collaborative and innovative ways to build wealth. FNB's Collective Buying allows families, friends, or even trusted groups of investors to not only share repayments and risks, but to co-create long-term asset value," he said. Co-leasing Tristen Henning, 28, who works in property management, says his decision to cohabit with a friend has given him access to a spacious three-bedroomed apartment in Blaauwbergstrand, Cape Town, which he would otherwise not be able to afford. "The co-habiting format makes renting a place more realistic for people my age, and with the job market being what it is, it just makes a lot of sense," he said. Smee says that in the rental space, there are a number of important legal requirements and risks that need to be thoroughly understood and pinned down before pals put pen to paper. First off, you need a rental agreement in which two or more individuals sign the same lease and share equal legal responsibility for the entire property. This type of arrangement is commonly used by roommates, friends, couples or business partners sharing a commercial space. If the landlord wants a lease with one primary leaseholder, all parties involved should sign a separate agreement that outlines each person's responsibilities. "These contracts can typically be drawn up on your own or with the help of a professional, both of which are legally binding once signed,' Smee said. He notes that in a case where two or more tenants sign a lease jointly, they are typically held jointly and severally liable. 'This means either tenant can be held responsible for the full rental amount or any damage to the property, regardless of who caused it. If one of the tenants chooses to move out over the period of the lease agreement, then a new contract will need to be drawn up.' He suggests that co-leasing tenants enter a sub-agreement that includes the following: Financial obligations and how payments are split. Responsibility for deposits and damages. Process for early termination. Replacement of departing tenants. 'Early termination is a common source of conflict, so it's vital to include clear terms,' says Smee. 'Treat this like a business agreement, even among family or friends and ensure responsibilities around deposits and replacement tenants are clearly outlined.'
IOL News
04-07-2025
- Business
- IOL News
How ageing infrastructure is impacting the local property market in South Africa
Municipalities are faced with the challenge of dealing with the legacies of the past regarding infrastructure development. Image: Se-Anne Rall The local property sector is facing challenges due to ageing public infrastructure, which suffers from limited maintenance and facilities management. This comes as South Africa marks the end of the first year since the seventh Administration took office, following the National and Provincial Government Elections that took place on 29 May last year. Additionally, there are ongoing delays in government payments to service providers, Nolubabalo Tsolo, the executive director at the Association of South African Quantity Surveyors (ASAQS), told "Independent Media Property". She said a key issue is the lack of transparency regarding national government properties. 'The government continues to occupy leased buildings while simultaneously leasing out its properties. To address these issues, the government needs to focus on improving its asset management systems. "This will ensure that public property assets meet both social and economic objectives, ultimately helping to identify the value they provide,' Tsolo said. The organisation which represents the quantity surveying profession at government, industry and any other forum said that with the 7th Administration, one year into the current term of office, the Minister of Public Works and Infrastructure (DPWI,) Dean Macphearson, has reported that state-owned buildings have been hijacked nationwide. ASAQS said the minister has committed to conducting a comprehensive audit of all government-owned properties. 'Additionally, the minister stated that these buildings will be rehabilitated and used for housing. This is a positive step toward addressing the housing challenge that we face in South Africa.' Addressing the Budget Vote on Wednesday, Human Settlements Minister Thembi Simelane highlighted illegal property occupation as a significant impediment to South Africa's development objectives. She said that during the current financial year, they will develop a Policy Framework for the Prevention of Illegal Eviction from an Unlawful Occupation of Land Act (PIE) to give effect to the latter's amendments. 'We will also embark on countrywide stakeholder consultations and engagement sessions with various sector partners in the human settlements value chain on the Prevention of Illegal Eviction from an Unlawful Occupation of Land Act (PIE) draft policy,' Simelane said. The housing backlog stands at over 2.4 million households in need of adequate housing in South Africa as per the National Housing Register. In the five years between 2024-2029, Simelane said working with all their strategic partners, they have undertaken to deliver 237 000 Breaking New Ground (BNG) units, 314 000 serviced stands, 140 000 subsidies disbursed through various housing interventions to the missing middle, upgrading 4 075 informal settlements, 15 000 social housing units, register and handover 80 000 title deeds and improve the management of available rental stock by achieving a 95% tenanting rate and a 90% collection rate in social rental stock. ASAQS said that challenges that are continuing to affect the South African property sector are the procurement processes, citing that there should be transparency on the procurement policies, and the country needs to be aware of the companies that are constantly appointed. It said the delay in the payment of service providers continues to be an obstacle to the progression of the economy of the country as this leads to companies closing and some employees' salaries being delayed. Tsolo said the DHS should aim to achieve a property management system that integrates with the asset management system and procurement system, thereby ensuring transparency to alleviate corruption. In the Budget Vote speech, Simelane said that a few years ago, the Department developed the Housing Subsidy System (HSS), a portal that is supposed to serve as a housing needs register data bank and information system. However, she said it is a legacy system which is not compatible with the latest technologies and lacks the critical component of citizen engagement. 'Working with the State Information Technology Agency (SITA), we are in the process of developing the National Digital Human Settlements Management System, which will modernise the way we manage human settlements data and improve coordination across departments. "This initiative will address current inefficiencies by providing a centralised platform for better resource management and service delivery,' Simelane said. She added that this system aims to improve efficiency, transparency, and accountability in the management of construction projects, ensuring the timely completion of projects and accurate allocation of resources. 'The integrated software solution aims to streamline and automate various processes related to managing human settlements. It will help government housing authorities, urban planners, and city administrators to efficiently manage housing, land, infrastructure development, housing beneficiary lists and related aspects of human settlements. "The development of a comprehensive, integrated online National Digital Human Settlements Management System (NDHS MS) will further enable citizens to apply online for a housing product and be informed about the outcome of their applications,' said Simelane.
IOL News
26-06-2025
- Business
- IOL News
Bridging the gap: essential insights on property ownership for young black South Africans
Many black citizens have been denied the opportunity to fully understand the benefits and pathways to property ownership. The reality is that many segments of South African society have been historically disadvantaged when it comes to access to property ownership and understanding how it can be used to build generational wealth, says Stefan Botha, the Director at Rainmaker Marketing, in response to an enquiry from "Independent Media Property". Many younger black South Africans were unable to learn about property ownership from their parents, as it had not been a legal or practical option for previous generations. As an example, he said black South Africans were officially allowed to own property throughout the country in 1991 with the repeal of the Land Act and the Group Areas Act. He said that consequently, property ownership was rarely, if ever, discussed around the dining room table. 'This remains a significant issue in South Africa. Many citizens have been denied the opportunity to fully understand the benefits and pathways to property ownership, and we must work to change that. "One major consequence of this history is a widespread lack of understanding about good versus bad debt. As a result, many South Africans are heavily burdened by debt and have little disposable income, often due to acquiring short-term debt for cars and luxury goods. "This puts both individuals and the broader economy at a disadvantage,' Botha said. Last week, "Independent Media Property" reported that many young people do not understand the mechanics of buying or investing in property or how to plan financially for long-term ownership. Tsekiso Machike, spokesperson to the Minister of Human Settlements (DHS) Thembi Simelane, said the country must enhance financial literacy and property education, "therefore, incorporate property and financial literacy into high school and tertiary curricula". Machike said the country must also encourage entrepreneurship in real estate. 'Youth entrepreneurs in real estate are underrepresented but can unlock job creation and innovation in the sector.' The department said youth representation in South Africa's homeownership and property sectors is currently limited, adding that there is a noticeable shift towards investment-focused property purchases. 'Economic challenges remain a significant hurdle, but initiatives and advocacy efforts are emerging to support and empower young individuals in these sectors.' The ministry, which facilitates the creation of sustainable human settlements and improved quality of household life, said there is also a need to improve access to financing; promote First Home Finance to be more accessible, better publicised and easier to navigate for the youth, since many youths are excluded from traditional lending due to low or irregular incomes, lack of credit history or student debt. The property and lifestyle marketing agency said that a key aspect of this problem is that people often over-extend themselves financially by taking on the wrong kinds of debt, which leads to poor credit records. It said this creates a vicious cycle, making it even harder for individuals to enter the property market. There is also a critical need for greater education around improving and rebuilding credit scores and financial histories. This kind of knowledge is essential to helping more South Africans qualify for property financing in the future, it added. Botha, an experienced property expert, said he believes the responsibility lies with both the private sector and the public sector in working together to drive meaningful change in the local property and economic sector. He said from a private sector perspective, education around property ownership is absolutely critical. 'It starts with helping people understand the basics of property ownership - how debt can be acquired, how it works and how it can be used as a tool to build long-term wealth through property.' He said that from a public sector perspective, there needs to be a more unified and coordinated approach to promoting property ownership across South Africa. 'In my view, the government can play a much greater role in supporting and funding initiatives that provide property education and access, ensuring these efforts are rolled out nationally and reach all market segments.'
IOL News
18-06-2025
- Business
- IOL News
Why young South Africans struggle to understand property investment
Many young people in South Africa are excluded from traditional lending due to low or irregular incomes, lack of credit history, or student debt. Image: File: African News Agency (ANA) Many young people do not understand the mechanics of buying or investing in property, or how to plan financially for long-term ownership. Asked by Independent Media Property what could be done to put the country's young people in better stead,Tsekiso Machike, spokesperson to the Minister of Human Settlements (DHS) Thembi Simelane, said the country must enhance financial literacy and property education,"therefore, incorporate property and financial literacy into high school and tertiary curricula". He said the country must also encourage entrepreneurship in real estate. 'Youth entrepreneurs in real estate are underrepresented but can unlock job creation and innovation in the sector.' Video Player is loading. 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Next Stay Close ✕ Last week, Siviwe Gwarube, the Minister of Basic Education delivered the keynote address at the Inaugural Policy Dialogue on Entrepreneurship Education. The event was hosted in partnership with the European Union's Education for Employability Sector Budget Support Programme. It aims to address South Africa's youth unemployment crisis through an education that empowers learners to be job seekers and job creators. In her address, Gwarube reflected on the growing urgency to equip South African learners not only with academic knowledge, but with the skills, mindset, and agency required to navigate a fast-changing and uncertain world. She will speak to the Department's broader Three-Streams Curriculum Model, the development of a national entrepreneurship education policy, and the strategic imperative to address South Africa's high youth unemployment through inclusive, innovative education pathways. This high-level dialogue aimed to ignite a cross-sector conversation on embedding entrepreneurship education into the basic education system. According to the recent Lightstone data, the youth accounted for roughly 25% of total home applications in South Africa during the first half of 2025. This was a slight decline from the previous years which is attributable to economic pressures and strict lending criteria. Machike said youth representation in South Africa's homeownership and property sectors is currently limited, adding that there is a noticeable shift towards investment-focused property purchases. 'Economic challenges remain a significant hurdle, but initiatives and advocacy efforts are emerging to support and empower young individuals in these sectors.' The ministry, which facilitates the creation of sustainable human settlements and improved quality of household life, said there is also a need to improve access to financing - promote First Home Finance to be more accessible, better publicised, and easier to navigate for the youth since many youths are excluded from traditional lending due to low or irregular incomes, lack of credit history, or student debt. Meanwhile, during the important period of heightened focus on the youth and youthfulness, and particularly as the growing trend of excessive spending, online gambling, and impulsive borrowing threatens to damage the financial futures of South Africa's youth, the National Credit Regulator (NCR) urged young consumers to exercise caution and financial responsibility. With the increasing popularity of the 'soft life' culture, epitomised by a lifestyle of luxury, designer brands, and instant gratification, many young people find themselves living beyond their means, said Lynette de Beer, Interim Chief Executive Officer at the NCR. She further added that this lifestyle, often glamourised on social media, is pushing South African youth into taking on unnecessary debt to keep up appearances or fund risky behaviours like gambling, sport betting and even forex. De Beer said impulsive debt almost always ends in long-term financial regret. She said what may seem like small loans or quick online bets can quickly spiral into a bad credit profile, reduce employment opportunities but also limit future credit access. For instance, securing a job that requires vehicle ownership becomes impossible with a bad credit score, she emphasised.
