Western Cape housing crisis deepens as studies reveal severe shortages

The Western Cape Government has released findings from comprehensive housing market studies conducted across seven municipalities, revealing a stark reality: there simply aren’t enough affordable homes for the thousands of families who need them.

The research, completed by the Department of Environmental Affairs and Development Planning in partnership with the Department of Infrastructure, examined housing markets in Swartland, Saldanha Bay, Overstrand, Breede Valley, Bitou, Knysna, and Oudtshoorn municipalities.

The studies paint a somber picture of housing inequality, with severe shortages in lower and middle-income segments while luxury properties remain well-supplied.

Critical housing shortages identified

The research identified several alarming trends across all seven municipalities:

• Entry-level housing crisis: Properties under R300 000 are severely undersupplied, leaving thousands of lower-income families unable to access formal housing
• Affordable housing gap: The R300 000 to R600 000 price range shows substantial shortages, with demand far exceeding available stock
• Middle-class squeeze: Even the conventional market segment (R600 000 to R900 000) faces notable shortages
• Luxury oversupply: High-end properties above R900 000 are well-supplied, highlighting stark market inequalities

These imbalances are forcing families into informal settlements and backyard dwellings as formal housing remains out of reach.

Government response and future plans

Western Cape Minister for Local Government, Environmental Affairs and Development Planning, Anton Bredell, emphasized the critical nature of these findings.

“This initiative is part of the Western Cape Government’s ongoing efforts to deepen its understanding of the local housing market dynamics, with the aim of advancing well-located, affordable housing opportunities,” Bredell said.

Western Cape Infrastructure Minister Tertuis Simmers highlighted the practical implications of the research: “These studies are pivotal in giving us the intelligence to invest smarter, plan better, and partner more effectively to deliver affordable housing where it’s needed most. The housing crisis is not just about quantity, it’s about access, location, and dignity.”

The current studies build on earlier research conducted in Drakenstein, Stellenbosch, George, and Mossel Bay. Stellenbosch has already begun implementing its own Inclusionary Zoning Policy based on the initial findings, demonstrating how the research can translate into concrete policy action.

Researchers noted that the studies primarily reflect formal housing market trends, meaning informal settlements, backyard dwellings, and subsidized units without title deeds are under represented in the data.

This suggests the true scale of housing need, particularly among the lowest income groups, is likely even greater than the already concerning figures revealed.

Next steps

The government plans to complete the final phase of the Housing Market Studies Round II project in 2025/26, which will revisit and update the original four municipal studies. This phase will include a knowledge-sharing workshop and publication of a consolidated comparative report identifying key trends and strategic interventions.

The findings are expected to help municipalities develop targeted responses, including potential Inclusionary Housing Policies, Affordable Housing Strategies, and innovative approaches beyond traditional state-subsidized housing delivery.