October 2 2026 17:00
Vanessa Murray, Divisional Executive, Nedbank CIB Property Finance
The IHS Affordable Housing Conference was held last month in Houghton, Johannesburg and one message stood out – Capital is ready for housing investments across SA but banks are wary of where to place the money. Former SARS head Edward Kieswetter said the country needed a Capitec moment but the truth is that there a plenty of systems in place which help people to finance homes. The biggest issue is a lack of supply of adequate housing.
Capital is finally in the room
Institutional money has arrived in South Africa’s affordable housing market. The question now is whether the sector can deliver enough investable product to keep it there.
That was the message running through the 18th IHS Affordable Housing Conference, held at The Houghton hotel in Johannesburg on 10 September 2026. The annual event is hosted by International Housing Solutions (IHS) and sponsored by Nedbank Corporate and Investment Banking (CIB) Property Finance, a partnership that has made it one of the fixtures of the local residential property calendar.
The room was a cross-section of the housing value chain. Developers sat alongside pension fund allocators, asset consultants, impact fund managers, lenders and property technology founders. Their shared starting point was blunt: South Africa has a housing shortage that will not close without the private sector, and there is now capital willing to fund it.
IHS itself is a case study in that shift. The private equity fund manager has been investing in affordable housing since 2005 across South Africa, Namibia, Botswana and Kenya. Over that period it has delivered more than 33,000 homes, raised over R25bn in institutional capital from local and international investors, and built a portfolio worth more than R7bn in assets under management.
IHS Group Managing Director Rob Wesselo summed up how far the sector has come. “Many institutional investors were not in this room five years ago, but are today,” he saud. Money flowing into the market was unusual, he said, and the industry now had to make developments work by ensuring that what it builds is genuinely more affordable.
Three threads ran through the day’s sessions. The first was the investment case for professionally managed rental portfolios, and why pension funds and asset managers are warming to it. The second was what makes a developer investable, and how costs can be contained before they scare capital away. The third was technology, with property technology (proptech) and artificial intelligence (AI) increasingly seen as essential rather than optional. A further panel looked at female representation in the housing sector.
The 2026 edition built on last year’s 17th conference, themed “Foundations for the Future: Housing the New World”, which drew some 373 delegates to the same venue.
A backlog of more than two million homes
The scale of the need was set out by Vanessa Murray, Divisional Executive of Property Finance at Nedbank CIB, in her sponsor address. More than three million households are registered for state housing assistance, she said, and the national backlog stands at over two million residential units.
Demand, in other words, continues to run well ahead of supply. Murray argued that this gap is exactly why affordable housing has become an important asset class with strong investment fundamentals. As investors come to recognise and understand it better, she said, that capital is also producing meaningful social impact.
She pointed to clear signs that the sector is maturing. Developers have shown how big the opportunity is, and that track record has drawn financiers, investors and institutional investors into the market. The goal now, she said, is to speed up solutions that are practical, sustainable and scalable, and the sector is starting to see that scale expand.
Yet Murray was candid about where the real bottleneck sits. Nedbank’s Gauteng property finance team, she said, sees every day that the problem is not a shortage of demand, ambition or opportunity. It is converting those opportunities into projects that are viable, can be scaled up, and deliver quality impact that lasts.
She also stressed that affordability alone is not enough. Homes in this segment must offer quality, dignified accommodation located close to jobs and services. Good location lets residents reach schools and amenities while cutting transport costs, which make up a large share of household spending for lower- and middle-income families.
Scaling up, however, will require collaboration across the entire housing value chain, supportive policy frameworks and a concerted effort to clear the blockages that slow delivery. That echoes the call Nedbank CIB made at last year’s conference, when it urged the public and private sectors to speed up township planning approvals, ensure dependable municipal infrastructure, and back well-located projects that investors can fund.
The panellists who followed broadly agreed on the diagnosis. The shortage is real, it is unlikely to ease on its own, and capital is available. What remains contested is how to turn that capital into homes.
Why pension funds are buying the rental story
For institutional investors, social impact on its own does not justify an allocation. The returns have to stack up against the risk. The conference’s central panel tackled that head-on, and its conclusion was that the strongest case for affordable housing now lies in professionally managed rental portfolios.
Moderator Solly Mboweni, Managing Director of IHS South Africa, drew out the reason. Residential rentals have a performance record that can be demonstrated to the people who control capital, which is not always true of build-to-sell projects or newer residential concepts.
Data was the recurring word. Khayise Mashifane, Executive: Residential Finance at Nedbank CIB, said the growing availability of performance data is building confidence in the asset class’s risk profile. As a result, he said, far more investors are now comfortable participating in the space.
Gregory Coe, Head of the FSC Fund at Old Mutual Alternative Investments’ impact investing business, made a similar point. The sector, he said, can point to clear evidence: consistently high occupancy, strong rental collection rates and the ability to behave as a defensive asset. Panellists noted that rental property is also a tangible asset with a relatively predictable yield, which suits long-dated liabilities such as pensions.
Modise Mongane, Investment Analyst for Alternative Investments at Alexander Forbes, put the inflation argument plainly. “Rent goes up every year, and it beats inflation,” he said. That is unwelcome news for tenants, he acknowledged, but for an investor it provides valuable protection against rising prices.
Wesselo offered the clearest stress test the asset class has faced. During the Covid-19 lockdowns, he recalled, shopping centres could not trade while rental housing kept collecting. At a time when much of the economy came to a standstill, residential rental proved itself one of the few steady performers.
The right investor, and an investable developer
If capital is available, the next challenge is matching it with the right projects. Panellists were clear that not every investor is a natural fit for affordable housing, and not every developer is ready for institutional money.
Heleen Goussard, Head of Alternative Investment Services at RisCura, urged developers to understand what kind of impact a particular investor is trying to achieve before pitching to them. Impact objectives, she explained, tend to be specific and local to each pool of money being managed. Some investors put housing at the top of their list, which makes them an obvious match. Others are focused on different outcomes, such as environmental sustainability, and may be a harder sell.
Across mandates, though, one trend is unmistakable. Impact as a general principle is rising up the priority list for institutional investors. Tshepo Radebe, Private Markets Analyst at the Eskom Pension and Provident Fund (EPPF), said the affordable housing opportunity is both exciting and easy to communicate to stakeholders because it targets the so-called missing middle. That is the large group of households who earn too much to qualify for state-subsidised housing but too little to secure a conventional bond. Opportunities like this are not common, he suggested, and they give investors a tangible sense of making a difference.
The other side of the equation is the developer. Murray stressed that while capital is looking for a home, developers must make themselves investable. In Nedbank’s experience, she said, the biggest obstacles when assessing a project are the developer’s skills, technical capability and track record. Once a funder is comfortable on those fronts, the final test is whether the product itself is fit for purpose for its intended market.
Thato Dikgale, Executive Head of Investment Consulting Services at NBC Holdings, added a warning about communication. In his experience, he said, the sector too often buries its value under jargon and needlessly complicated concepts. That opacity distracts investors from the fundamentals and, in his view, actively starves the asset class of capital that would otherwise flow towards it.
The message for developers was consistent: know your investor, prove your capability, and explain your proposition simply.
Costs: the battle is won before the first brick
A strong investment case can still be undone by runaway costs. Several speakers returned to the same squeeze: development and operating costs are rising, but rents in this segment cannot climb faster than tenants’ incomes.
Matt Marshall, partner and co-founder of venture capital firm REdimension Capital, framed it simply. Bricks are not getting any cheaper, rental growth is capped by what households earn, and yet the industry still has to make a profit. Making housing more affordable to build and run, he is the only way to expand the sector and keep investors rewarded, and technology has a significant role to play in that.
Wesselo noted that infrastructure and administered costs, such as municipal rates and utility tariffs, are also on the rise. These are largely outside a landlord’s control, which puts even more pressure on the costs that can be managed.
Nic Foce, Managing Director of residential developer Foce Property Investments, pointed to where the money goes. Roughly 70% of the cost of a property development, he said, is tied to the debt and construction stages of a project.
The experts on the cost panel agreed that the biggest risks usually emerge before construction even starts. Project development, the planning phase and the choice of professional team for a specific project all carry risks that, if poorly managed, can cause budgets to balloon and scare investors off.
Procurement came in for particular attention. Panellists warned that choosing the wrong materials can create financial consequences that only show up years later in maintenance and replacement bills. There are interesting opportunities to reduce costs, including importing materials from markets such as China, but speakers cautioned that these only make sense on a case-by-case basis.
The common thread was people. With the right development and project management teams in place, panellists said, decisions are made faster and better, and costly mistakes are caught early.
PropTech and AI: from nice-to-have to necessity
If costs are the problem, technology was presented as a large part of the answer. The tone of the PropTech and AI session was notably practical, with speakers describing systems already in use rather than distant promises.
Wesselo set the scene. Running a building with 1,000 tenants, he said, means proptech is fast becoming the only realistic way to manage a growing portfolio. With administered costs rising, technology is one of the few levers operators can pull to soften the impact.
Peter Stainton, Executive Head of Property Management at Eris Property Group, said digital tools have made breakthroughs easier as more operational processes move online. The biggest gains so far have come in leasing and student accommodation, where the sheer volume of leases makes AI-driven automation especially valuable. With the income side now relatively mature, he said, the expense side of the operating model is the next frontier.
Nic Foce described how his firm uses voice-recognition software on site. Decisions made during inspections are recorded and automatically shared with every relevant team. Small steps with AI, he argued, can shift large levers, and reliable, predictable automation should be on every developer’s agenda. Tasks best done by computers should be left to them, freeing staff to focus on dealing with people.
Foce also flagged an untapped opportunity. Property managers supply residents with several utility services but tend to focus only on collecting rent. His company is already installing electricity infrastructure, solar panels, water tanks and smart meters, and he argued that bringing these into the management layer would consolidate data and improve margins.
The most ambitious example came from Nico Papanicolau, IT Executive at commercial property financier TUHF Capital. The company has deployed AI agents, known as agentic AI, to fill around 56 roles. Its data, roughly 50 TB in total, feeds an agentic system that synthesises the information and serves it to staff in ways that were not previously possible. Administration can consume 60% to 70% of a skilled employee’s time, he said, and TUHF aims to cut that sharply.
Papanicolau noted that only about 20% of an organisation’s data typically sits in formal internal records, with the remaining 80% held in employees’ heads and inboxes. His advice was to start by digitising processes, then identify where AI can help. He stressed that safety is built in, from strict guardrails on data and decisions to compliance with the ISO 27001 information security standard.
Wayne Berger, co-founder of SA Proptech, said the property sector is often risk-averse. Many companies make large technology investments every five years, then sink more money in when the systems disappoint. His advice was to learn from failures quickly and move on, digitise first, and give staff access to AI tools so that the skills gap can be closed.
Women in housing, and what comes next
The programme also included a panel on the importance of female representation in the housing sector. The topic has become a regular feature of the IHS conference. At the 2024 edition, Murray moderated a session on women leading in residential property, and gender equity was listed among that year’s core themes. Its return in 2026 signals that the industry sees diversity in leadership as part of building a more credible, investable sector, not a side issue.
So what should investors and developers take away? First, the debate has moved on. A few years ago, the question was whether affordable housing could be an institutional asset class at all. Today, with pension funds, asset consultants and impact investors on stage, the question is how to deliver enough well-run, well-located product to absorb the capital that is available.
Second, the binding constraint is execution. Murray’s observation that opportunities outnumber viable projects was echoed throughout the day. Developer capability, early-stage cost control, procurement discipline and clear communication with investors all came up repeatedly as the things that separate fundable projects from the rest.
Third, operations are now part of the investment case. The proptech discussion made clear that efficient management, data and automation are no longer back-office concerns. In a segment where rents are capped by incomes, cost savings from technology go straight to the bottom line, and the data those systems generate is what gives investors confidence.
Finally, the public sector remains a missing piece. Speakers repeatedly pointed to the need for supportive policy, faster approvals and reliable municipal infrastructure. Without those, even the best-capitalised developers will struggle to close a backlog of more than two million homes.
247@propertyflash.co.za
