Is South Africa’s buyer-friendly housing market coming to an end?
First-time buyers are increasing as some research points to rising house prices.
Image: Freepik
South Africa’s property market is showing signs of a shift toward favouring sellers, with first-time buyers driving much of the recent growth in applications for bonds.
BettaBond’s December Property Brief indicated that applications for bonds are on the increase. According to BetterBond report, the North West, Free State and Northern Cape each accounted for 72% of home loan applications.
Johannesburg’s South-Eastern and North-Western suburbs posted strong demand at 65%. Application volumes overall are now 23.5% higher than at the end of 2023, BetterBond’s data indicates.
The bond originator points to several factors for the surge in buying, including affordability.
However, its finding that average house price inflation is 2.8% - which remains slightly below the Consumer Price Index – is at odds with other research.
According to the First National Bank House Price Index, the FNB House Price Index is continuing its upward trend, although the pace of growth in prices decelerated lightly to 4.9% year-on-year in October.
This was compared with September’s annualised figure of 5.1% in September. In August, annual house price growth accelerated to 4.5% – at that time the fastest pace since 2022.
Statistics South Africa also points to rising home prices.
In the agency’s recently published for Residential Property Price Index Report for July, it said that property price inflation was 5.8% in July 2025 year-on-year. Inflation is currently 3.6%.
With BetterBond’s research showing an increase in buyers, and both Statistics South Africa as well as FNB’s index indicating prices continue to gain ground, these signs could indicate that there is a swing to a sellers’ market.
A sellers’ market would emerge if demand outstrips supply even as bonds become more affordable.
BetterBond notes that first time buyers are driving the push towards buying homes of the back of lower interest rates and a more accommodating lending environment.
“The share of applications from first-time buyers increased in seven of the nine major regions, suggesting a strong shift towards improved affordability and accessibility,” says Bradd Bendall, BetterBond’s national head of Sales.
The average home price for first-time buyers remained stable at around R1.3 million, BetterBond said.
BetterBond noted that the prime lending rate ended the year 150 basis points lower than at its peak in 2024, supporting a 16% year-on-year increase in home loan applications.
Application volumes are now 23.5% higher than at the end of 2023, BetterBond noted.
Lower deposit requirements have further enhanced affordability, with first-time buyers benefiting from a 20% year-on-year reduction and a 13% quarter-on-quarter drop, it said, the company said.
BetterBond’s data also points to a more accommodating lending environment, with declines in bank impairments relative to assets making financial institutions more open to new applications.
South Africa’s broader economic outlook also supports the property market, BetterBond said.
The country posted 2.1% year-on-year gross domestic product growth in the third quarter of 2025, the highest in three years, while the rand strengthened by 10% against the US dollar, it pointed out.
“The standout positive for South Africa’s property market, as reflected in the latest Property Brief, is the surge in first-time buyers,” said Bendall. “Their increased activity and improved affordability are driving a strong and sustainable recovery heading into 2026,” he added.
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