What we know so far
South Africa’s housing backlog stands at an estimated 2.6 million units, and the department responsible for closing it is now working with a shrinking budget.
Human Settlements Minister Thembi Simelane disclosed the figure while tabling her department’s 2026/27 Budget Vote in Parliament on 27 May 2026. She said the latest census shows 11.7 percent of households still live in informal dwellings.
In the same speech, Simelane confirmed the department’s baseline has been cut by R20.6 billion over the Medium-Term Expenditure Framework. She described the department as operating under severe fiscal constraints.
The largest single reduction falls on the Urban Settlements Development Grant, which is cut by R19.7 billion over the framework period. That grant funds bulk infrastructure in metropolitan areas.
The minister also conceded the department missed its delivery target in the previous financial year. It completed 23,027 housing units against a target of 37,779.
The 2.6 million backlog figure is not new. It has been cited through 2026 by the minister, the South African Local Government Association, and housing bodies. What is new is the combination of that standing shortfall with a confirmed multi-year funding reduction.
Why it matters
The backlog affects more than 12 million people, according to figures the minister has repeatedly cited. Demand continues to grow under rapid urbanisation.
The funding squeeze lands on a department that was already delivering below target. With fewer rands and a rising population, the gap between need and supply is set to widen rather than close.
The cut to the Urban Settlements Development Grant is significant because bulk infrastructure, water, sanitation, roads, and electricity connections, is what makes serviced housing possible. The grant to metros falls from R9.249 billion in the previous year to R4.079 billion in the current year, a reduction the minister put at 67 percent over the framework.
Pressure is also visible at city level. Simelane noted that a 1,200-unit social housing project in Cape Town drew more than 15,000 enquiries for its first phase alone, a sign of how far demand outstrips supply.
Government policy is shifting toward partnerships and private delivery. The minister framed the department’s position bluntly, saying it has no choice but to do more with less.
Opposition parties rejected the budget. A Rise Mzansi lawmaker, Makashule Gana, argued that housing should not be built far from jobs and services, reviving a long-running criticism of South Africa’s spatial planning.
Key details and figures
The department’s total Medium-Term Expenditure Framework allocation is R81.364 billion, with R26.972 billion allocated in the current financial year.
Conditional grant funding for the current year totals R23.679 billion, or 87 percent of the annual allocation. Of that, provincial departments receive R15.183 billion and metropolitan municipalities receive R8.486 billion.
For 2026/27, the department has set targets including 39,058 housing units, 25,186 serviced sites, 21,918 title deeds, 2,878 social housing units, and 744 units for military veterans. It also plans to eradicate 6,950 mud houses and install 11,215 solar systems.
On the previous year, the minister reported the Housing Development Agency acquired 2,447 hectares of well-located land, exceeding a 1,000-hectare target. The First Home Finance programme delivered 10,856 units.
The department identified 212 blocked housing projects nationally in 2025/26. Of these, 85 were unblocked, delivering 1,136 units across Gauteng, the Free State, the North West, KwaZulu-Natal, Mpumalanga, and Limpopo.
The minister said the census shows 84.1 percent of households now live in formal dwellings, up from 73.5 percent in 2002.
What happens next
Simelane said the department will table the Prevention of Illegal Eviction from and Unlawful Occupation of Land Amendment Bill in August 2026. The draft bill has been gazetted for a 60-day public comment period.
She said the department will review its Medium-Term Development Plan targets with the Department of Planning, Monitoring and Evaluation at a mid-year review, to ensure they remain realistic given the budget cuts.
The minister also pledged action against underperforming contractors and officials who fail to complete procurement within prescribed timeframes, saying the situation of missed targets cannot continue.
Whether the department can lift delivery while absorbing a R20.6 billion reduction remains the central unresolved question. The mid-year review will be the first official test of how far the targets hold.
