Women in their thirties dominate SA’s township market

According to BetterBond’s data for January to May 2024, 55% of all buyers in traditional townships such as Protea Glen in Soweto, Soshanguve, north of Pretoria and Mitchell’s Plain in Cape Town were women. Just over half were between the ages of 30 and 39, says Bradd Bendall, Head of Sales of BetterBond. “Many women buyers in townships are young professionals or single mothers investing in a family home. In line with this profile, these women also spend more on their township properties.” The 30 to 39 age cohort recorded the most transactions for homes of more than R1m.

The township economy is estimated to be worth approximately R100b annually, serving as hubs of “entrepreneurial activity and innovation”. An article on township economies in South African Business Integrator noted that “the purchasing power within townships is substantial, with estimates suggesting a consumer market worth billions”. This makes the township property market an exciting investment opportunity, notes Bendall. “As suburbs in traditional townships burgeon to offer a range of affordable property options as well as access to an array of formal and informal economic opportunities, there’s been renewed demand for homes in these areas,” explains Bendall.

Younger buyers in their early twenties are also flexing their buying potential, accounting for a significant portion of the sales over R1m. “It could be that these buyers have financial support. Some of the main banks offer a range of loan products that include loans of as much as 110% for young professionals under the age of 30. This makes it possible to buy a home without having a deposit. Or they could be earning enough to spend on a home that they can perhaps rent as a buy-to-let investment.” Furthermore, underlining the affordability of homes in traditional township areas, more than 80% of BetterBond’s registrations during the first five months of this year were for homes valued at less than R1m.

While women dominate the township market, according to BetterBond’s registration data, there has been a general dip in buyer activity across the board. Sustained high interest rates and other cost-of-living increases have had an impact on women’s buyer activity across all markets, notes Bendall. BetterBond’s data for May showed that the number of women buyers nationally dropped by more than 50%. However, as evident in the township markets, much of the activity that is taking place is from women buyers in their twenties and thirties. “After more than a year of high interest rates, women buyers are showing signs of financial strain, and we are seeing a dip in bond registrations by women. However, with indications pointing to an imminent drop in the prime lending rate, this activity may pick up again towards the end of the year.”

Interestingly, while women are currently buying comparatively fewer homes than in previous years, women still make up the lion’s share of property owners in South Africa, and the value of women-owned property stock is higher than their male counterparts’ portfolios. This is partly because, as Lightstone has reported, in recent years, more women purchased property on their own than men or married couples. The latest Absa Homeowner Sentiment Index notes “an increasing trend towards single women applying to purchase homes more so than men. In addition, many of these South African buyers are young, black females”. Bendall adds: “It’s encouraging to see that many of these young, black buyers are considering traditional townships for their property investments.”

Buyer feedback reported by the Absa Index shows that younger women wanted to buy property as an investment, for financial security or because there’s more value in paying off their own bond than someone else’s rent, says Bendall. “StatisticsSA shows that more than 42% of South African households are female-headed, so it’s not unexpected that women are the major drivers of property sales especially in traditional townships. As interest rates are expected to drop later this year, we can expect increased activity from this important housing market segment.”

Issued by: Aithne Molotsane