Why Cape Town leads pack in residential construction trends

The sector showed growth in the third quarter of 2025

- By Setumo Stone

South Africa's construction sector is undergoing a significant transformation, with metropolitan municipalities increasingly favouring the development of freestanding homes over flats in the past decade.

According to Momentum Investment’s latest Business Pulse, between 2014 and 2023, Between 2014 and 2023, Stats SA’s review of the residential sector revealed that cities have been “building out rather than building up”, focusing on single-unit residential houses rather than multi-unit apartments.

This trend highlights shifting urban dynamics and consumer preferences, as well as the challenges and opportunities facing the residential construction industry. The City of Cape Town emerged as the leader in residential construction during this period, recording the highest number of new residential buildings at 96 725 units.

Tshwane followed with 55 095 units, and Ekurhuleni came in third with 44 320 units.

Cape Town also led in the construction of houses and flats, while Johannesburg recorded the most townhouses built.

Interestingly, flats accounted for only 1% of new residential buildings in Johannesburg, highlighting a preference for horizontal expansion rather than vertical growth.

“Stats SA’s review of the residential sector found that metropolitan municipalities were building out [i.e. building more freestanding homes] rather than building up [flats] between 2014 and 2023,” the report states.