Property

Great news for anyone looking to buy a home in South Africa

Staff Writer

 ·28 Jul 2025

South Africa’s property market is experiencing an upward shift as lower interest rates and inflation-beating salary increases are spurring activity.

The latest home loan data from home loan comparison service Ooba shows improvements across all major indicators in the property market.

This has been reflected in an upward turn in home loan activity and affordability as household income growth has largely outpaced inflation in key regions.

Borrowing costs have also reduced, Ooba said, thanks to a 100 basis point cut in interest rates since September 2024.

Ooba said that the banks have also come to the party, pushing competitive rates on loans and offering some of the biggest discounts on the prime lending rate seen in recent years.

“These culminating factors have yielded positive outcomes, with Ooba Home Loans’ application volumes rising by 11% year-on-year and the total value of these applications increasing by 18.5%,” the group said.

“These figures signal a decisive rebound from the post-pandemic slump that bottomed out in the fourth quarter of 2023.”

According to the group, home loans achieved an average interest rate of prime less -0.67%, a notable improvement of -0.11% recorded in Q2 2024 and the -0.12% in Q1 2025.

Between January and June 2025, the average rate of prime minus 0.67% is better than the prime minus 0.57% recorded in the first half of 2024.

Looking at different regions in the country, the Western Cape saw the highest average discount at prime -0.96%, followed by the Eastern Cape at -0.74%.

Year-on-year, Mpumalanga and Tshwane saw the biggest improvements in their pricing, with rate discounts up by -0.19% and -0.17%, respectively.

The group noted that on top of getting bigger discounts on bank loans, the number of loan approvals has remained fairly high at 82.6%.

The average price of a home in South Africa

Ooba’s second quarter data for 2025 shows that homebuyers are spending more on a home, with the average property purchase price increasing by 3.9% year-on-year to just under R1.7 million.

The average bond approval is R1.45 million, and the average deposit placed down has declined to R240,000.

For first-time homebuyers, the average purchase price for a home is R1.24 million, with bond approval sitting at R1.1 million, and deposits at R120,000.

The average age of a first-time buyer is 35, Ooba noted, with the percentage of first-time homebuyers increasing to 46% in Q2.

Ooba said demand from this segment is expected to gradually rise following the next interest rate cut, currently expected in for July, or possibly September.

“Banks are actively stimulating this market segment by offering attractive incentives, such as zero-deposit and cost-inclusive home loans,” he notes.

Ooba noted a marked decline in home loan deposits, which drifted lower relative to the same period last year.

On average, deposits were down by 13.5% year-on-year. Despite the drop, deposits still represent a substantial 14.1% of the average purchase price.

Regionally, the group’s data showed substantial increases in average property prices in the Free State and Tshwane in particular.

From January to June 2025, the Free State and Tshwane saw significant year-on-year growth in the average purchase price paid, up by 12% (R1.16 million) and 10.1% (R1.77 million), respectively.

Tshwane also registered the highest growth in average monthly gross income for the same period, up by 15.9% to R78,713.

Meanwhile, the country’s most expensive region, the Western Cape, recorded a 3.3% year-on-year increase in the average purchase price, bringing it up to an average of R2.39 million, while Johannesburg’s purchase price rose by 5% to R1.65 million.

“With the exception of Gauteng South and East, every region recorded an increase in the average purchase price over the quarter from year-earlier levels – a promising indicator for the market at large,” Ooba said.