Gauteng’s restless sprawl — a magnet for young professionals semigrating in search of stability — is increasingly feeling like a place where affordability is slipping into myth.
The province’s entry-level housing market, long a foothold for aspiring homeowners, is under quiet but intensifying pressure.
Soaring municipal rates and taxes, electricity and water bills — those discreet lines on a household budget — are steadily eroding the promise of accessible, secure living.
For aspiring homeowners in Gauteng, affordability is no longer just about the purchase price — it increasingly hinges on what it costs to keep the lights on and the taps running.
During the year, the City of Johannesburg announced that property rates have risen by 4.6%, while electricity tariffs show a 12.74% increase, and those for water and sanitation have been hiked by 13.9%.
Municipal rates and taxes have risen far faster than inflation over the past decade, climbing 174% between 2010 and 2021 compared with a 72% increase in the consumer price index. The pressure is even greater in major metros: Joburg’s municipal rates alone rose 48% over the period — an average annual increase of 6.6%, well above the CPI’s 4.8%, according to Paragon Finance.
Yet while affordability declines, buyers’ expectations are rising. Absa’s latest homeowner sentiment index (HSI) shows a marked shift: demand for eco-conscious homes is accelerating, with buyers increasingly weighing the long-term operating costs of power and water.
“The demand for alternative energy solutions remains strong despite reduced load-shedding, driven by steep electricity price increases,” said head of strategy and partnerships at Absa Home Loans, Tshepo Mashashane.
“This supports the view that eco-conscious properties offer lower running costs,” he said. This trend is underscored by a 10% rise in applications for Absa’s Eco home loan over the past year.
Lightstone data shows that young adults aged 20 to 35 — the cohort most visibly reshaping South Africa’s mobility patterns — accounted for 29.7% of all property transactions in 2024.
And the momentum is shifting in even more interesting ways. Absa’s HSI for the third quarter notes that rising homeownership aspirations among single women are steadily fuelling activity in the residential market.
BetterBond’s national sales head, Bradd Bendall, sees a similar pattern. An easing of load-shedding has injected some optimism, while rapid densification in Cape Town, Gauteng and KwaZulu-Natal — paired with a growing appetite for ESG-aligned, energy-efficient living — is reshaping the affordable end of the market. Developers are adjusting accordingly, pivoting towards designs that shield households from the relentless inflation of utilities.
Few have ridden that wave as aggressively as JSE-listed Balwin Properties. The developer is among the world’s largest producers of Edge Advanced–certified apartments, with more than 27,000 units already accredited.
Compared with conventional building methods, this green building certification by the International Finance Corporation (IFC) encourages architects to design for real efficiency — cutting energy consumption by more than 40% and water and embodied carbon from materials by at least 20%, at a time when all three are climbing steeply.
According to independent research conducted by the University of Cape Town, Edge Advanced apartments can typically save homeowners between R1,800 and R8,200 a year in utility costs through lower electricity and water consumption.
Though these numbers may not seem dramatic, over a 20-year bond term, it adds up to a saving of between R37,000 and R164,000.
Balwin CEO Steve Brookes says the green push isn’t ideological; it’s financial.
“Just before Covid, I promised [President Cyril] Ramaphosa that we’d get poor people — who pay notoriously high interest rates — into owning property titles, not just the rich. We need to break the culture where only wealth gets you a good rate,” he said.
Balwin’s model hinges on the mechanics of its Green Bond, an initiative introduced by Brookes in 2020. Supported by most major financial institutions and bond providers, including Nedbank, Standard Bank, Absa and SA Home Loans, Balwin’s Green Bonds leverage the lower energy footprint of its apartments to the benefit of its homeowners.
A buyer purchasing a R1.25m apartment, for example, qualifies for an additional reduction of between 0.25% and 0.75% in interest because the unit is Edge Advanced certified. Over a 20-year bond term, that saves the homeowner almost R150,000. The certification sticks with the apartment, so the next buyer inherits the efficiency — and the cost savings.
Backing from the IFC and the UK government further sweetens the deal. The institution lends to local banks at favourable rates via its Market Accelerator for Green Construction (MAGC) programme. The purpose of MAGC is to scale up green-building construction through blended finance and technical assistance to help South Africa meet its greenhouse gas emission goals.
Through MAGC, buyers qualify for a 3% rebate on their bond, up to a maximum value of R55,000 for Edge Advanced apartments. On a R1.25m bond, that’s more than R37,000 injected straight into the mortgage.
Brookes, who also sits on the board of the Green Building Council of South Africa (GBCSA), said 90% of Balwin’s buyers now take up green bonds — a sign that affordability in South Africa may increasingly hinge not just on entry prices, but on what it costs to live in a home over time. In a market where traditional affordability is being quietly eaten away, the green pivot is no longer a luxury; it’s the new battleground.
The eThekwini municipality has confirmed to Business Day that it is considering weaving in a 35% rebate on Edge-certified buildings.
While the green building incentive policy is still in its draft stages, Balwin is already looking to implement this with other municipalities in the future.
“We had a big surprise recently: eThekwini municipality in KwaZulu-Natal intends to give all our clients a 35% reduction in their rates and taxes, which is massive, and I’m now approaching municipalities across the country to do the same because these buildings are Edge Advanced — that’s my next mission,” Brookes said.
The rationale is clear-cut — Edge Advanced buildings impose far less strain on municipal infrastructure, providing a defensible basis for cities to extend rate relief to developments that materially ease the burden on public services.
“There are very clear, real-world savings for residential property owners who adopt sustainability measures. Edge Certification — the IFC’s green building rating system administered locally by the GBCSA — is designed to help a building cut its energy and water usage by at least 20%, and the financial impact of that efficiency is substantial,” said Georgina Smit, head of technical at the GBCSA.
Simon Chemaly, head of commercial property principal investments at Absa, says there has been a notable mindset shift in South Africa’s property development community. Developers are responding to stronger tenant and investor demand for efficient, resilient buildings that offer cost stability and align with corporate sustainability goals.
“At the same time, lenders and institutional investors are increasingly directing capital towards green or certified assets, creating a clear financing advantage. As a result, sustainability has evolved from a compliance consideration to a competitive differentiator, particularly in commercial property,” he told Business Day.
Chemaly adds that through Absa’s IFC-backed Market Accelerator for Green Construction and the rollout of Edge Expert training, the bank is equipping developers to deliver energy- and water-efficient buildings that reduce costs, shorten bond durations, and generate long-term value while supporting the country’s climate and development goals
Smit says South Africa’s four largest metros — Joburg, Cape Town, eThekwini and Tshwane — have set ambitious net-zero carbon targets under the C40 Cities South Africa Buildings Programme. The plan is bold: all new buildings must achieve net-zero emissions by 2030, while existing structures are expected to follow suit by 2050.
“The new Climate Change Act (2024) puts municipalities at the centre of South Africa’s climate response, making them responsible for local climate plans, low-carbon design, emissions tracking, and community-driven sustainable growth. While many initiatives are still taking shape, we remain optimistic about their future impact,” Smit said.
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