The expensive South African city giving away ‘free’ homes

Cape Town has overtaken Johannesburg by delivering more state-subsidised housing than all three Gauteng metros combined over the past five years, cementing its national lead in affordable housing delivery.

In the last five years, 12,401 units were handed over in Cape Town, more than double the next metro, eThekwini, at 5,355.

It is also more than all three Gauteng metros combined, with Ekhuruleni (5,167), Joburg (4,932), and Tshwane (1,811) still falling close to 500 units short of Cape Town’s total.

“The evidence is clear: no city is putting national housing grant funding to better use than Cape Town,” said Cape Town Mayor Geordin Hill-Lewis.

“We are not only spending the money we get; we are ensuring that quality completed units are handed over to the rightful beneficiaries.”

As national subsidies have dwindled over the years, Hill-Lewis said the “free” housing programme has become increasingly reserved for the most vulnerable and poorest.

“Not only does Cape Town lead on this pro-poor delivery, we are also leading on enabling much more affordable housing delivery by the private sector.”

The city does this through accelerated land release, reducing red tape for micro-developers, and a range of incentives to drive affordable rental housing.

“We will only ever meet housing demand – not by state-led delivery – but by repositioning our cities as key enablers of much more private sector-led housing delivery.”

This affordable housing push is especially notable when considering that the city has the most expensive property market in the country.

According to The Africanvestor, the average house price in Cape Town reached R3.5 million in September 2025.

“The city shows significant price variations across different property types and neighbourhoods, from affordable Northern Suburbs starting at R1.2 million to luxury Atlantic Seaboard properties exceeding R40 million,” it said.

Rental prices in the city also outperform all other cities in the country. Studios start at R9,000 in the CBD, and luxury properties can command over R80,000 monthly in premium locations like Camps Bay, The Africanvestor reported.

Cape Town is South Africa’s affordable housing king

When it comes to affordable housing, Cape Town is leading the way nationally through several initiatives. These include:​

• Land release for affordable housing: The City has released more land for affordable housing in the last three years than in the previous decade combined, with a pipeline of 12,000 well-located affordable housing units close to the CBD and other important parts of the metro.
• Land Discount Guidelines allowing City-owned land to be heavily discounted, maximising the number of social housing units developed – a national first.
• Utility Discounts for Social Housing for water, electricity, and property rates bills for social housing properties, another first.
• Municipal Planning By-Law Amendments to streamline development approvals and reduce red tape, especially by micro-developers building small-scale units.
• Support for Micro-Developers: including pre-approved building plans and development charge discounts to encourage the safe and compliant construction of small-scale rental units in townships and areas of highest demand.

“Besides ensuring that pro-poor grant-funding is well-spent, the City also plays an enabling role in state-subsidised housing developments,” said Mayoral Committee Member for Human Settlements Councillor Carl Pophaim.

These developments are delivered by Cape Town’s partners in the Western Cape Government and the national Housing Development Agency, which contributes to its strong performance relative to other cities.

“Our metro also places a big emphasis on home ownership, including the accelerated handover of historical title deeds,” Pophaim said.

“We have further launched our unique ‘no cost transfer’ programme to turn thousands of tenants into homeowners by transferring the City’s affordable rental units to beneficiaries at no cost.”

According to a parliamentary reply by Human Settlements Minister Thembisile Simelane, since 1994, significantly more state-subsidised housing units have been completed in Cape Town (202,070).

This is despite the fact that the metro has a much smaller population than Johannesburg, which completed 179,114 units.