House prices continue to trend upwards, making it difficult for first-time buyers to enter the market.
Image: File
The government should consider potentially widening the eligible salary range for the first-time home buyers benefit.
It could be widened to cater for a wider salary range to ease pressure and support first-time buyers, says Candice Mncwabe, the Western Cape Committee Member of the South African Reward Association (SARA).
The professional body aimed at promoting the reward profession and practices made this call ahead of Finance Minister Enoch Godongwana delivering the 2026 Budget Speech on Wednesday, February 25.
The Financed Linked Individual Subsidy Program (FLISP), better known as First Home Finance, was developed by the Department of Human Settlements (DHS) to enable sustainable and affordable first-time home-ownership opportunities to South African citizens and legal permanent residents earning between R3 501 and R22 000 per month (the “affordable” or “ gap” market).
According to DHS, individuals in these salary bands generally find it hard to qualify for housing finance. “Their income is regarded as low for mortgage finance, but too high to qualify for the government 'free-basic-house' subsidy scheme.”
In January this year, BetterBond, a bond originator, said house prices continued their upward momentum, notwithstanding the loss of working days during December.
It said inflation increased year-on-year by 3.3%.
“House price increases for first-time buyers were marginally lower, at 2.2%. However, in nominal terms, these buyers are paying more for their homes – as prices hit a record high of just over R1.3 million.”
The qualifying applicants may use First Home Finance to do one of the following:
First Home Finance Applicants must meet the following qualifying criteria:
First Home Finance is for residential properties in formal towns where transfer of ownership and registration of a mortgage bond is recordable in the Deeds Office.
In an article published by ooba Home Loans titled, “Affordable housing in SA: The opportunities for first-time homebuyers”, the group says house prices continue to trend upwards, making it difficult for first-time buyers to enter the market.
“But don’t give up hope. Not only are there places where affordable housing can be found, but there are also government programs, such as FLISP, designed to help first-time buyers acquire property.”
It said that the work-from-home lifestyle means that purchasing homes in more affordable outlying suburbs (or even nearby towns) is a viable option. It added that affordable suburbs include False Bay and Parklands (Western Cape), Midrand and Randburg (Gauteng), Morningside and Glenwood (KwaZulu-Natal).
The government program FLISP subsidises home purchases for buyers with low incomes, it added.
The most pressing issue right now from a remuneration perspective is the misalignment between published inflation and the actual cost of living impacting employees, Mncwabe says.
“Salary increases are outpacing inflation due to pressure on households' day-to-day expenses. The other contentious issue is around medical aid tax credits, which are projected to fall away, thus placing more pressure on households and salaries as a whole.”
SARA says there is a divergence between published inflation and actual salary pressures as increases currently outpace inflation.
It says direction around the medical aid tax credits, which are rumoured to fall away to make way for NHI, as well as clarity on tax brackets and any ease/adjustment where there is bracket creep. “These have an impact on take-home pay.”
Potentially increasing tax-free savings thresholds could encourage investment to support household financial stability and property market stability, SARA adds.
Any change or lack of change in personal tax thresholds is of critical importance for employees and for the reward profession, Mncwabe says.
She says there have been two years of tax creep now through not changing tax brackets, and if there is a third year of no change, there will be a significant increase in the average marginal tax rate for employees over the last 3 years, which results in them having relatively lower take-home pay from their income.
“Removing medical aid tax credits would exacerbate this.”
“They also haven't changed tax-free interest thresholds for a couple of years now, and the tax-free savings limit has never been adjusted. So neither of these encourages savings. A shift in both thresholds would be good.”
Meanwhile, South Africa’s property sector is evolving so quickly that it is hard for the talent pipeline to keep up, says Gerard Abrahamse, general manager at ASI Property.
The specialist property management business says there are plenty of opportunities for growth, investment, and transformation, but a shortage of skills remains one of the industry’s biggest hurdles.
“And it’s not just a local issue; countries around the world are dealing with similar pressures as property sectors everywhere adapt to change and new skill demands.”
If the country does not deliberately invest in developing people, the sector’s growth simply won’t be sustainable, warns Abrahamse.
The property sector is a major part of South Africa’s economy, supporting jobs, investment, and the development of South Africa’s cities and communities, says ASI Property. “At its core are the people whose skills and expertise drive growth and ensure buildings and developments meet the needs of society.”
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