FNB property survey picture for Roy's story.photo by Simphiwe Mbokazi 453 The ideal is a more inclusive housing market where youth across income levels can access homeownership in a sustainable way.
Image: Simphiwe Mbokazi
South Africa’s youth is entering the housing market under increasing financial pressure, which is delaying homeownership and limiting capacity for long-term credit.
For Gen Z, affordability constraints, broader household strain and competing priorities are key factors shaping this trend, says Ayesha Hatea, the Director of Research and Consulting at TransUnion South Africa.
She says TransUnion’s Q1 2026 Consumer Pulse Study (CPS) shows many consumers expect difficulty meeting at least one financial obligation thereby reflecting financial pressure that can delay higher-value decisions such as entering the property market.
“However, younger consumers remain active in credit, often starting with entry-level products to build credit histories,” Hatea says.
Compared to five to 10 years ago, TransUnion South Africa says the key shift is a slower transition from credit participation to asset ownership.
The provider of commercial, consumer, insurance and auto risk information solutions across a number of industries, says some fifteen years ago, barriers were more cyclical in nature, whereas today they are structural, driven by affordability constraints, tighter lending conditions and slower income growth. As a result, it says engagement is strong, but conversion into homeownership is delayed.
According to Hatea, property ownership remains a key goal, with Gen Z actively managing finances and building credit early. However, she says affordability is the central challenge.
The director says cost pressures limit the ability to save for deposits, while a widening gap between property prices and early-career incomes delays entry into the market.
She says thin credit profiles further constrain access, shifting property ownership from an immediate milestone to a longer-term goal.
The National Debt Counsellors (NDC) says that according to industry data, 72% of Gen Z South Africans have no credit history, while young people under the age of 24 make up just 0.5% of the country's credit market.
Experts warn that having no credit history can be just as limiting as having a poor one when it comes to accessing future finance.
According to TransUnion SA, expanding the use of alternative data and advanced analytics is critical to support accurate assessment of thin-file borrowers.
The provider says this can be complemented by targeted interventions such as deposit support mechanisms, innovative financing models like rent-to-buy or shared ownership, increased supply of affordable housing and earlier financial education.
It added that its CPS findings show many consumers remain cautious about taking on new credit commitments, highlighting the need to bridge the gap between credit participation and conversion into long term asset ownership.
If unaddressed, the company says these challenges risk entrenching a generation excluded from asset ownership, limiting wealth creation and reinforcing inequality over time.
Inclusive housing market where youth across income levels can access homeownership is ideal
The ideal is a more inclusive housing market where youth across income levels can access homeownership in a sustainable way, Hatea says.
She says this would require earlier entry into ownership, credit models that accommodate thin files and non-traditional income streams and better alignment between housing supply and affordability.
“While progress has been made in improving credit inclusion, financial pressure remains a constraint. Currently, Gen Z is credit-active, but property ownership is still largely aspirational.”
The provider says the government has a role to play through policy support, incentives and increasing the supply of affordable housing. It says financial institutions can drive innovation in credit assessment and product design, while property developers can align supply more closely with the needs of first-time buyers.
“Credit bureaus play a key role in enabling broader data inclusion and improving visibility into creditworthiness, while employers and the private sector can support financial wellness and savings behaviour.
“Ultimately, progress depends on aligning efforts to address both demand-side constraints and supply-side gaps.”
The outlook for youth property ownership is likely to be gradual, shaped by both economic conditions and the pace of structural reform, says Hatea.
Affordability likely to remain a constraint in the next five years
She says that over the next five years, affordability is likely to remain a constraint. She says many Gen Z consumers will continue to progress along the credit lifecycle from entry-level products toward more complex financial commitments.
“Increased use of alternative data and more flexible lending models will begin to support this transition.”
Over a 10-year horizon, Hatea says broader access could emerge as lending models evolve and incomes stabilise, enabling greater participation in homeownership.
Over 15 years, the director says there is potential for a more inclusive and digitally enabled housing finance ecosystem, where access to property ownership is better aligned with how younger consumers earn, spend and engage with financial products.
Without meaningful intervention, however, TransUnion delayed homeownership risks becoming a structural feature rather than a transitional phase.
“Young South Africans, particularly Gen Z, are active in the credit economy and remain highly aspirational about property ownership. The challenge is enabling that participation to translate into long-term asset ownership through more inclusive, data-driven and coordinated solutions,” Hatea says.
Meanwhile, the Credit Association of South Africa (CASA) says every year, millions of credit applications are declined by the formal financial sector.
It says behind every declined application is a person trying to solve a real-life problem: paying school fees, repairing a vehicle, covering a medical emergency, purchasing stock for a small business, or simply making it through the month.
It says when formal credit is unavailable, consumers do not suddenly stop needing finance but increasingly turn to illegal lenders and mashonisas, unregulated products that often fall outside consumer protection frameworks and alternative forms of borrowing that offer little recourse when things go wrong.
"The reality is that when regulated credit becomes inaccessible, consumers do not disappear,” says Leonie van Pletzen, CEO of the Credit Association of South Africa (CASA).
“They simply move elsewhere."
"That should be a concern for all of us,” she continues.
“The question is not if consumers will borrow. The question is whether they will borrow from regulated institutions that operate under strict consumer protection requirements, or from providers operating outside the formal system."
Industry research indicates that modernising aspects of South Africa's credit framework could unlock more than R300 billion in additional formal credit, supporting financial inclusion, SME growth, economic participation and job creation.
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