Property prices in South Africa have climbed, but they haven’t kept pace with the cost of living. New data from Lightstone shows that a R1 million budget now buys a home that is significantly smaller than it did a decade ago, forcing buyers to make difficult trade-offs.
The numbers behind the shift
Between 2016 and 2026, freehold house prices increased by about 41%, while sectional-title prices rose by 29%. Over the same period, headline inflation climbed by 59%. The result is that property has become more expensive in nominal terms, but relatively cheaper than many everyday goods and services. Households face higher transport and electricity costs, and although formal-sector earnings grew by 72%, that increase has not fully offset the surge in living expenses.
Lightstone’s House Price Index reveals a stark decline in what a R1 million can secure. In mid-value areas, that budget used to purchase roughly four out of five freehold houses sold in 2016. Today, it buys fewer than half. The situation is even more acute in high-value neighborhoods. A decade ago, about one in three freehold houses fell within the R1 million price range. Now, fewer than one in ten do.
The data also shows a clear shift in property types. In 2016, freehold houses accounted for 59% of R1 million transactions, compared with 41% for sectional-title units. By 2026, the balance had reversed: sectional-title units represented 53% of these transactions, while freehold houses made up 47%. Buyers are increasingly choosing apartments and townhouses to stay in desirable locations rather than sacrificing land for a standalone home.
This trend is visible in the physical size of properties. In mid-value areas, a typical R1 million freehold house is now about 40 square meters smaller than in 2016. Stand sizes have shrunk by roughly 180 square meters. Sectional-title units have seen a similar reduction, with apartments losing approximately 25 square meters of floor space. Many buyers who previously afforded three-bedroom apartments now settle for two-bedroom units, and the share of two-bathroom units has fallen from around 75% to 50%.
Regional performance varies widely. Cape Town and coastal markets have recorded strong growth, while Johannesburg has remained comparatively subdued. Cape Town flat prices increased by 64% over the decade, whereas Johannesburg flat prices rose by just 7%. This difference means a R1 million budget in Johannesburg still buys more than half the flats sold, while in Cape Town it secures only about one in five. Garden Route suburbs like Keurboomstrand saw prices increase by approximately 140%.
Suburb-level data highlights pockets of relative value. In Johannesburg, areas such as Paulshof and Glenferness recorded typical flat prices below their 2016 levels. Mulbarton saw prices climb from about R700,000 to just over R1 million, while Pretoriuspark Extension 32 in Tshwane rose from approximately R435,000 to the same threshold. In contrast, Observatory and Woodstock in Cape Town experienced increases of 40% or more.
What this means for investors
Lightstone’s findings reinforce three important investment considerations. Affordability is increasingly location-dependent. A R1 million budget offers substantially different opportunities across South Africa’s metropolitan and coastal markets. Sectional-title properties are becoming more important. Their growing share of entry-level transactions highlights the relevance of apartments and townhouses to both homeowners and residential investors. Capital growth is not guaranteed. Some markets have delivered strong nominal appreciation, while others have experienced stagnant or declining prices, even before accounting for inflation.
Value matters more than price
The biggest lesson from Lightstone’s ten-year analysis is that property affordability cannot be measured by purchase price alone. A R1 million property today may offer less space than a decade ago, but residential property prices have also increased more slowly than inflation and many household expenses.
