South African homeowners can pay R11,500 per month more than they expect

The true cost of owning a property can be thousands of rand more than a homeowner’s monthly bond repayment, with levies, rates, utilities and maintenance adding up to as much as R11,500 a month.

This is according to Landsdowne Properties CEO and Founder Jonathan Kohler, who explained that bond approvals often give buyers a false sense of comfort.

A 100 m² sectional title apartment in Bryanston can carry a monthly cost package of about R4,000 to R7,000 or more before the owner has paid one rand toward the bond.

In Claremont, a similar two-bedroom apartment generally incurs about R4,200 to R7,000, or more, in levies and municipal accounts before the bond is paid.

In KwaZulu-Natal’s coastal nodes, the number can be higher. In anonymised Landsdowne-managed examples, an uMhlanga apartment can incur monthly holding costs ranging from about R6,500 to more than R11,500.

Meanwhile, a comparable Ballito property can range from about R3,500 to R7,000, depending on the scheme, amenities, consumption, and municipal billing.

“These figures point to a problem that buyers still underestimate,” Kohler said. “The bank may approve the bond, even as the home’s full monthly cost remains largely untested.”

“That second monthly bill can include standard levies, administrative levies, reserve fund levies, rates and taxes, water, electricity, statutory charges, security, repairs, backup power and special levies.”

Kohler explained that this is not always presented as a single figure. In fact, it rarely appears neatly in the sales conversation. Nevertheless, it still lands in the same household budget every month.

This is the second bond, Kohler said. The first bond secures the transfer, while the second bond determines whether the property is affordable to carry after transfer.

“The issue is no longer whether buyers know levies exist. Most do. The issue is that affordability testing still treats the full monthly cost of owning the home as an afterthought,” he said.

Running costs are rising

Kohler said buyers are conditioned to focus on the purchase price and the monthly bond instalment. Banks test repayment ability, agents market the listing price, and friends and family ask whether the bond is manageable.

“Those questions matter, but they do not show whether the property will remain affordable in year two, year three or year five,” he said.

“The timing matters because running costs are rising. Eskom’s approved 2026/27 increase is 8.76% for direct Eskom customers and 9.01% for municipal customers.”

In Johannesburg, approved tariffs from 1 July 2026 include increases across water, sanitation, electricity, refuse and property rates, Kohler added.

“Those increases do not stay inside municipal notices. They move into levy budgets, utility recoveries, rental negotiations, insurance decisions and household bank accounts,” he said.

“Coastal property also brings its own cost profile. In premium coastal areas such as Umhlanga, holding costs are generally higher than comparable inland nodes.”

Kohler explained that this happens because the underlying property values are higher, which pushes up municipal rates.

Body corporate costs can also be higher because coastal buildings require ongoing maintenance against salt air, corrosion, humidity, and weather exposure.

“Lifts, balustrades, facades, waterproofing, paintwork, gates, access systems and common property all need closer attention in that environment,” he said.

“That is why a coastal apartment may have a stronger lifestyle and investment appeal, but still carry a larger second bond.”

The risk is greater for sectional titles

Purchasing a sectional title makes the risk more acute because the person is buying more than just a unit, Kohler explained.

“They are buying into a shared financial system with income, expenses, arrears, reserves, insurance obligations, maintenance needs and governance risks,” he said.

“The apartment may be private, but the financial health of the building is shared. A low levy should therefore be read carefully.”

He noted that while this sometimes reflects an efficient, well-managed scheme, it can also reflect a building postponing the real cost of maintenance.

“Owners then pay later through special levies, deteriorating common property, weaker security or lower resale value. The levy is a monthly charge, but it is also a signal,” he said.

Investors face the same problem with yield. Kohler said a sectional title unit may look attractive because the price is reasonable and the rent appears to cover the bond.

“The numbers change quickly when levies rise, insurance premiums reset, arrears weaken the scheme, utility recoveries increase, or a special levy is raised for waterproofing, lifts, access control, backup power or overdue repairs,” he said.

Looking at gross yield can make a weak investment look better than it is, but net yield is where the risk becomes clearer.

Tenants also feel the pressure through the building’s daily reliability, Kohler said. They may never see a levy statement, but they live with its consequences.

“Failed gates, unreliable lifts, poor lighting, weak water management and slow maintenance all affect the value of a rental,” he said.

“When ownership costs rise sharply, the pressure eventually appears in rent discussions, renewal terms and repair decisions. The cheapest rental is not good value if the building does not function properly.”

What buyers, landlords and tenants should look for

According to Kohler, green features also need a harder look. While a generator may keep the lights on, it does not make a building green.

Backup power indicates what still works during an outage. Green certification tells a buyer whether the building has been assessed for lower resource use.

Solar, batteries, smart meters, efficient lighting, and water systems can reduce exposure to rising operating costs, but only where the savings are real, the system is maintained, and future replacement costs are budgeted.

Some banks offer concessions or rebates on qualifying green-certified homes or approved EDGE-certified developments. However, Kohler said that it should be treated as one part of the calculation.

The useful question is whether green infrastructure lowers the second bond in practice. Before signing an offer, buyers should request a monthly cost breakdown. In a sectional title, that includes the:

• Levy schedule, latest budget
• Financial statements
• Arrears position, reserve fund, insurance schedule, utility recovery method
• Special levy history
• AGM minutes and details of any backup or green infrastructure

According to Kohler, landlords in South Africa should run their yield calculation after including those costs.

“Tenants should ask about utilities, backup power, water reliability, access control, parking, security and maintenance response before signing a lease,” he said.

The market is good at pricing bonds, he added. It now needs to calculate the cost of running the home. That is the number that determines whether a property remains affordable, rentable and liveable.