Demand for apartment-type living has risen sharply throughout South Africa as households increasingly shop for cost-controlled, energy-efficient homes.
According to Statistics South Africa’s June 2026 building statistics release, the value of residential building plans passed by larger municipalities increased in the first half of 2026 compared with the same period in 2025. This growth was largely anchored by strong investment in higher-density housing formats, which saw total approved values increase by R1.67 billion across all residential categories.
Interpreting the data, Just Property CEO Paul Stevens believes the development pipeline is a reflection of the way households are responding to the country’s economic climate. “With the prime lending rate at a steep 10.5%, annual consumer inflation at 4.3%, recent electricity tariff hikes, and the rising costs of accommodation and utilities, it’s easy to see why people are making different financial decisions,” he says.
Stats SA’s data shows that while approved building plans for traditional standalone dwellings eased slightly in late 2025, approvals for compact units, co-living developments, student accommodation and retirement villages surged during the same period - a pattern that has continued into 2026. “Freehold family homes remain popular with South Africans who want space and independence, but the strong uptick in planned alternative housing tells us that buyers and investors are prioritising secure, modern lock-up-and-go units in convenient locations.”
The costs of living and renovating
Housing and utility costs are increasingly influencing affordability decisions, Stevens adds. “The average South African household spends more than 34% of its total consumption budget on housing and utilities, which explains why demand for smaller, energy-efficient homes with predictable running costs is on the up.”
Stats SA renovation trends reinforce his observation. While the total value of approved residential building plans rose in the first half of 2026, planned additions and alterations declined by R459.4 million (-3.2%), suggesting that households are delaying upgrades in favour of newer, cost-controlled units.
“As a rough starting point, renovating an older home costs anywhere from R12 000 to R18 000 per square metre, and up to R30 000–R45 000/m² when you add solar, generator and water systems,” he says. “By contrast, new sectional title units typically range between R16 000 and R22 000/m², many of which come with integrated energy features.”
The buyers
Leading the new unit-buying charge are young professionals and first-time purchasers who want 20 - 35 sqm apartments near Rosebank, Cape Town’s City Bowl, Umhlanga and other business nodes, Stevens continues. “BetterBond’s 2026 average purchase price for first-time buyers has hit a record R1.4 million, and first-time purchasers now make up more than half of BetterBond’s applications. Compact, secure, energy-efficient units offer what they’re looking for in terms of their affordability thresholds and their long-term value expectations.”
Retirees and downsizers follow closely, replacing large family-size properties with units that allow them to free up equity, reduce maintenance and enjoy tighter security.
From a rental perspective, the demographics show high demand for purpose-built student accommodation and smaller units, with the result that stock supply is tightening and creating an obvious gap for developers, he adds.
Approvals vs completions
For Stevens, plan approvals show where developer investment is heading, but completion figures add important context. “In the first half of 2026, Stats SA reported that the value of traditional houses that were fully built and completed increased by R384.8 million compared with the same period in 2025. At the same time, the value of total completions declined by more than 7% overall. As the gap between approvals and completions widens, we’re likely to see a wave of new, off-grid units entering the market over the next 12 to 24 months.”
Semigration
Semigration is also having an impact on buying patterns, especially along the coast:
- Western Cape: The province is leading national residential development, with Cape Town, the Helderberg Basin and the Garden Route popular choices for apartments and secure estates.
- Gauteng: Showing steady, balanced demand with strong take-up in Pretoria East, Midrand, Sunninghill and Randburg.
- KwaZulu-Natal: Activity is concentrated along the North Coast (Ballito, Salt Rock and Umhlanga), driven by lifestyle relocations and demand for contemporary estate living.
- Eastern Cape: Consistent performance led by Gqeberha, with interest split between established coastal homes and new, low-maintenance townhouses.
The investor takeaway
For investors, the current market presents opportunities across both established and emerging categories, Stevens says. “Freehold homes offer long-term stability, while compact units come with lower vacancy risks, predictable levies and solid rental returns. With national house price inflation holding in the 3% - 5% range - below CPI - investors can capitalise on a rare combination of affordability, liquidity and resilience, particularly in the sub-R1.5 million bracket.”
