Most real estate agents have mastered the art of the open house in the city or charmed their way through complex estate deals in the suburbs. However, one overlooked segment may mean commissions are being left on the table. The affordable housing market in South Africa is brimming with opportunity, and much of it is happening in traditional townships. According to Lightstone, just over half of properties in the affordable market, defined as those valued up to R750,000, are located in these areas.
With increasing demand for entry-level housing, townships are becoming vibrant hubs of economic activity, community development, and real estate transactions. For agents willing to broaden their horizons, the township market offers not just deals but the chance to play a meaningful role in transforming neighbourhoods and improving lives.
Township sales deserve a spot in that portfolio
Experts at Kasinomics estimate the township economy to be worth around R1 trillion and growing steadily, with consumers showing impressive flexibility in their spending power. Major brands like Shoprite, Spar, and Tiger Brands have taken notice, expanding their footprint to tap into this dynamic market. Naturally, this economic activity is fuelling a vibrant and increasingly attractive property sector, opening the door for real estate agents to unlock new business potential.
“For real estate agents, operating in townships has proven to be a great opportunity,” says Riefqah Jacobs, Principal at Harcourts Ikhaya. “We’re seeing first-time buyers who are after an affordable home to put down roots. On the flip side, there are plenty of sellers who have become established and want to move from the township to the suburbs.”
With home loan providers backing buyers in townships, agents are well positioned to grow their market share. “Banks have opened up the channels to financing in those areas previously not bondable and identified as ‘red zones’,” says Jacobs. “This is a great opportunity for all who previously wanted to purchase and could have qualified, but due to the strict criteria of banks were not able to secure a mortgage loan.”
Besides the appealing price point, Lindi Sechabela, Principal and Owner at Astute Homes, says there’s an increasing trend of township residents upgrading their properties. While previously four-roomed properties were standard, buyers have more value and range, offering agents the chance to market these homes based on their enhanced features and potentially achieve higher selling prices and higher commissions.
“We are seeing a migration of clients who are now moving from the suburbs back to Soweto,” she says. “While suburbs often come with a higher cost of living through ever-increasing rates, taxes, and levies, for example, Soweto’s services have remained at reasonable prices.”
For enterprising property practitioners, a township like Soweto provides access to a fast-growing, affordable property sector with a diverse and motivated buyer pool. In 2024, Seeff reported that the township saw property values doubling over the last 10 years. Over the past year, more than 2,000 property transactions were recorded alone, worth over R1.1 billion. The area has become a popular choice for its amenities like schools and shopping centres, access to transport, a close-knit community, a spirited lifestyle, and student rental potential. Agents who recognise the potential in their local townships will have a clear path when marketing and selling properties in the areas.
What’s holding back agents from township sales?
While the township property market offers plenty of opportunities, it’s not without its challenges, and many agents are feeling it. According to a Prop Data poll, 43.2% of real estate agents admitted they were “a little uncertain” or “not confident at all” when handling township property transactions.
“This could come down to the complexities of township dynamics,” notes Jacobs. “Not all agents have the know-how of the inner workings of townships and how to overcome the challenges.”
According to Founder and Managing Director of Amana & Co Inc., Thulisile Buthelezi, a significant portion of township residents live in informal settlements without formal land tenure, and the process of formalising these areas is often slow and complex. On top of this, title deed backlogs remain a persistent issue — despite government efforts, many properties still lack formal documentation, making it harder to establish clear ownership or leverage property for economic benefit.
“A daunting prospect for real estate agents is where properties previously purchased directly from the seller have never been through the legal process of transfer,” says Jacobs. “Rather, there was an exchange of funds, and that was considered done. Adding to that, many title deeds are still with the previous owners who are then not traceable or deceased.”
Jacobs says that the buy-to-let market in townships can also throw real estate agents a curveball. “We’ve had illegal tenants not willing to move, and then the community will advocate for those illegal occupants to remain, making the marketing of properties more complex than usual.”
Buthelezi says another challenge lies in the valuation and financing of township properties. These homes are often undervalued compared to their suburban counterparts, which impacts access to fair market transactions and financing options.
“From my experience, we’ve also seen cases of family home disputes and potential buyers battling with raising funds for properties,” says Sechabela. “There’s also the reality of township life, which agents have to deal with. In Soweto, Eskom’s load reduction to avoid equipment damage is having an impact on the quality of life of residents and damaging the area’s charm for buyers and renters.”
How to rise above township challenges
Here’s the good news, though. With the right approach and mindset, driven real estate agents can successfully navigate township challenges and unlock a thriving sales market. Here’s how to make it happen:
- Put the right policy in place: Jacobs says her team has implemented a policy in the office where a thorough due diligence of the property is done before going out to assess the property. “We will do a property report, verify the person who contacted us for our services is the rightful owner of said property, request copies of title deeds if necessary and any or all documentation pertaining to the property should we face a situation with discrepancies of ownership,” she says. “This has streamlined the listing process so when we do list a property for sale, we have mitigated all concerns for a smooth transaction.”
- Work on being a local expert: “You need to spend time in the community,” says Sechabela. “Get to know the neighbourhoods, understand the market trends, and connect with local leaders and residents. When people see you as part of their world, not just someone trying to sell a house, you’ll earn their trust and their business.”
- Support community-based initiatives: “Innovative community-based approaches are emerging to facilitate property ownership in townships,” shares Buthelezi. “Programmes that involve community participation in the formalisation of land tenure and property registration are showing promising results.” Real estate agents can play an active role by supporting and getting involved in these initiatives, helping to strengthen relationships in the community and staying informed about local developments.
- Empower clients with knowledge: Many township residents may not have reliable internet access or easy access to the resources they need to navigate the property market confidently. This is where real estate agents can step in. They can help clients understand important topics like the First Home Finance programme or connect them with financiers like uMaStandi, which offers mortgage financing, as well as training, mentorship, and guidance for property entrepreneurs looking to grow their businesses in townships.
With the right mix of preparation, local expertise, and a genuine commitment to the community, real estate agents can overcome the challenges of township sales and tap into one of South Africa’s most promising property sectors. More than just driving sales, they can play an important role in helping township residents unlock opportunities, build wealth, and strengthen their communities, creating a win-win for everyone involved.