Should a home still be your biggest financial goal?
· Citizen
For years, people have been told that buying property is the ultimate wealth-building strategy. It is advice that has become almost a financial gospel: buy a house, and pay off the bond.
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Homeownership was seen as both a lifestyle milestone and a retirement strategy. Some even rent out their homes.
But in 2026, with rising living costs, changing lifestyles and more investment options than ever before, is owning a property still considered the cornerstone of a financial plan?
Yes and no
Bryan Nicol, a certified financial planner (CFP) with Doshguide, says the answer is both yes and no to the question of whether owning a home is still a financial goal.
“Property remains one of the most powerful tools for building long-term wealth, but it’s important to distinguish between a home you live in and a property you buy as an investment,” he says.
“A primary residence is first and foremost a lifestyle asset that provides security and stability, while an investment property is purchased to generate returns through rental income, capital growth or both. Although a home may appreciate in value over time, that doesn’t necessarily make it the most effective retirement strategy.”
Mistakes many make when buying a home
Nicol highlights that the biggest mistake many people make when buying property is assuming it is automatically a good investment because property prices increase over time. But that is not how a good investment work.
“What matters is the return you achieve after accounting for costs, interest, maintenance, rates and taxes, insurance, and the opportunity cost of tying up your money,” he adds.
While a home is often a family’s largest asset, much of that wealth remains tied up in the property itself.
“Unlike retirement savings, shares or other investments, the house you live in doesn’t provide an income stream when you stop working. The reality is that when you retire, you still need somewhere to live. Unless you’re planning to sell or downsize, that value isn’t generating an income for you. It’s a distinction that many South Africans overlook.”
Other investment options
He notes that investing has become more accessible than ever. So people do not have to only focus on buying property as an investment.
“Investment products such as low-cost index funds, retirement products and tax-free savings accounts have lowered the barriers to entry, allowing ordinary South Africans to build diversified portfolios, often straight from their smartphones,” says Nicol.
“As a result, building long-term wealth no longer requires millions of rand or taking on significant debt.”
But he emphasises that property has not lost its appeal. “Property remains unique because it combines an asset with a practical need: a place to live.
“For many households, buying a home creates financial discipline that might otherwise be difficult to maintain. Every bond repayment gradually converts debt into equity, building wealth over time.”
Should young professionals buy homes?
Nicol says that whether buying a home makes financial sense largely depends on individual circumstances.
“Someone who plans to stay in a property for a decade or longer may benefit significantly from ownership.
“But a young professional who moves frequently for work, or someone buying in an area with weak property growth, may find that renting and investing the difference elsewhere delivers better returns.”
A good investment?
The conversation has also shifted from whether property is a good investment to which property is a good investment.
“Property markets are highly localised,” says Nicol. “Over the past decade, we’ve seen significant differences in performance between cities such as Cape Town and Johannesburg, reminding investors that buying property is not enough and where you buy matters just as much.”
Statistics South Africa’s Residential Property Price Index illustrates the point. Between 2010 and 2022, residential property prices in Cape Town increased by 141%, compared to 71% in Johannesburg.
Location, demand, infrastructure investment and local economic conditions can have a significant impact on long-term returns. Two properties purchased for the same price in different cities can deliver vastly different outcomes over time, making careful research just as important as the decision to buy itself.
Higher interest rates
Nicol notes that higher interest rates in recent years have further changed the equation.
“Rising borrowing costs have increased the true cost of homeownership, making affordability a more important consideration than ever before,” he says.
“The question, therefore, should not be whether property is still a good investment. The better question is whether it is the right investment for you, and how it fits into your broader financial future.”