Affordable housing in SA: The opportunities for first-time homebuyers

Article summary

• The work-from-home lifestyle means that purchasing homes in more affordable outlying suburbs (or even nearby towns) is a viable option.
• Affordable suburbs include False Bay and Parklands (Western Cape), Midrand and Randburg (Gauteng), Morningside and Glenwood (KwaZulu Natal).
• The government program FLISP subsidises home purchases for buyers with low incomes.

House prices continue to trend upwards, making it difficult for first-time buyers to enter the market. But don’t give up hope. Not only are there places where affordable housing can be found, there are also government programs, such as FLISP (more on that later) designed to help first-time buyers acquire property.

Here we discuss:

1. Where to find affordable housing
2. Government programs that help first-time buyers find affordable housing

Affordable housing in South Africa: Where to look

Where to look in the Western Cape

The appeal of remote areas

In the wake of the lockdown, the work-from-home lifestyle has seized hold. Many are moving to larger homes in remote areas, using the internet to stay in touch with work while enjoying quieter neighbourhoods and more scenic surrounds.

This makes outlying suburbs, where housing is more affordable, an attractive option for first time home buyers.

The Western Cape is the ideal region for this, being the location of quiet seaside suburbs and idyllic coastal towns.

Affordable suburbs in Cape Town include:

• False Bay (a coastal suburb with access to beaches and golf courses).
• Hermanus (a quiet coastal town about two hours drive from Cape Town. Faciltiies such as schools and shopping centres are growing in number here).
• Parklands on the West Coast.
• Goodwood, home to Grand West Casino and Entertainment Centre.

Where to look in Gauteng

According to Lightstone data, 31.1% of the affordable market is situated in Gauteng, by far the most out of the three major provinces (Western Cape has 13% and KwaZulu Natal has 12%).

Affordable suburbs in Gauteng include:

• Midrand (close to the City Centre, with easy access to major highways).
• Randburg.
• Fourways, with average property sale price being R2.2 million while offering proximity to the Sandton CBD.
• Roodepoort.
• Krugersdorp.

Where to look in KwaZulu Natal

• Morningside (average sale price of R1 800 000, close to the centre).
• Glenwood (average sale price R1 500 000, close to the centre).
• Amanzimtoti (a laid back coastal town near Durban).
• Durban South (large houses at affordable prices, close to beaches).

Government programs: FLISP

The ideal option for first-time home buyers; FLISP is a program that subsidises home purchases for low-income earners.

If your income ranges from R3 501 to R22 000 per month, you may qualify for FLISP, provided you meet the other criteria.

Criteria for FLISP:

• You must be a South African citizen with permanent residency in South Africa.
• You must not have received a government housing subsidy before.
• You must be married or cohabiting OR single with financial dependents.
• You must be over 18 years old.
• You must not have owned a fixed residential property before.

The subsidy ranges from R30 001 to R130 000, depending on your income. This subsidy can be paid into your home loan, or used as a deposit. Banks are more likely to grant home loans to buyers bolstered by FLISP.

How do I apply for FLISP?

With the help of ooba Home Loans, you can apply for FLISP while at the same time getting the best deal on your home loan.

ooba Home Loans submits your home loan application to multiple banks, allowing you to compare deals and choose the one with the lowest interest rates. At the same time, we’ll submit your FLISP application and monitor its progress.

Are you interested in applying for FLISP? Get all your questions answered, such as whether you qualify, how to apply and how FLISP can be used to acquire your first home.