Mchunu, who was addressing delegates at the start of a two-day lekgotla, said he believed people owned three or four RDP houses.
He said people were even boasting about the fact they owned these houses and the amount of money they made from renting them out.
Mchunu did not state how wide-spread the problem was, but said “it was not hidden”.
At a funeral he attended, a woman described how she bought and renovated RDP houses and then rented them out at a premium, he said.
Mchunu also said that in line with providing housing, the province needed to eradicate slums and prevent new ones being established.
“Slums need to be totally eliminated.”
He warned if service delivery was not improved rapidly, “the alternative is too diabolical to contemplate”.