It has been a year of unexpected vigour for South Africa’s housing market, thanks to multiple drops in the prime lending rate and an accommodative lending environment, says Bradd Bendall, BetterBond’s National Head of Sales. “Throughout the year, the market showed renewed momentum with a steady increase in home loan applications, supported by a strengthening economy and successive interest rate cuts.” These factors bolstered buyer confidence and increased market activity in most regions, especially in Gauteng and the Western Cape.
Drawing on insights from BetterBond’s monthly Property Briefs, Bendall reflects on the key trends that defined South Africa’s buoyant housing market this year.
Favourable lending environment
A strong rate cutting cycle in 2025 has been a significant driver of buying activity over the past 12 months, says Bendall. “The year started with strong signs of recovery and home loans in January were up a significant 7.5% compared to the same period last year.”
Higher home loan volumes
Although not at pre-Covid levels, home loan application volumes have increased significantly during 2025, notes Bendall. Applications rose by 14.6% year-on-year by the third quarter of this year, reaching their highest levels in three years. “Applications are now 26% above the low seen in 2023, and we expect the impact of this year’s multiple interest rate cuts to stimulate similar activity into 2026.”
Improved affordability
Deposit required for all buyers applying for a bond decreased by 6.7% year-on-year to R285,000, while those for first-time buyers fell by nearly 15% to R169,000 – their lowest level in over a year. This, coupled with lower interest rates, has made homeownership more accessible.
Regional highlights
In April, Gauteng led in overall home loan volume, accounting for 48% of all home loans granted, with strong performance in the South-Eastern suburbs of Johannesburg for first-time buyers.
The Western Cape dominates in terms of bond value, attracting buyers from all over the country because of its enviable lifestyle and efficient service delivery. By the middle of 2025, it accounted for 38% of residential loan values, with R4.4 billion in new building completions.
Tshwane surprised with an impressive 27% year-on-year increase in bond approval activity, sending a strong signal that the country’s administrative capital boasts a strengthening economy.
In March, the Free State and Northern Cape recorded the highest year-on-year home loan growth of around 29%. Meanwhile the Eastern Cape also showed improvement with the highest increase – around 10.2% – in home loan approval ratios since 2021. This performance meant it surpassed the Western Cape with a stellar 83.9% home loan approval ratio: well above the 77.5% average for all regions.
In June, the Greater Pretoria region emerged as a housing growth hotspot, experiencing a 26.7% increase in bond applications over the past year – nearly double the growth of the Western Cape’s traditional semigration market – driven largely by a boom in new residential, particularly student, developments.
Building plans
The Western Cape had the highest share of municipal building plans passed. Sustained investment interest in this province has seen ongoing demand for various property types, says Bendall. Johannesburg’s South-Eastern suburbs have also performed well, with new sectional title developments going up in response to the need for accommodation for first-time buyers and young professionals. August’s BetterBond Property Brief reported building plan approvals for alterations and additions increased from 25.4% to 31.5%, suggesting an increased appetite for renovations.
Better access for first-time buyers
Overall house price inflation breached the R1.6 million threshold – a record high, while home prices for first-time buyers hit R1.3 million. “Over the past six years, average house prices have risen by 10.7%. This double-digit growth reinforces the value of property as a long-term investment,” says Bendall.
“This shows that lower interest rates and improved access to financing made it possible for more first-time buyers to enter the market. This is good news for the housing market’s continued growth in 2026.” First-time buyers also welcomed the significant drop in deposits required – now 15% below last year’s peak – which has also made homeownership more accessible this year.
Data showed that Johannesburg’s South-Eastern suburbs and the Western Cape were hotspots for first-time buyers. Loans granted for this group increased by 33%. However, there were also signs of positive shifts for first-time buyers in Mpumalanga, the Free State, the Northern Cape and North-West.
More activity at the upper end of the market
The upper end of the market benefited most from this year’s interest rate cuts. BetterBond’s data pointed to a marked drop in bonds granted for homes of R500 000, while bonds for homes of over R3 million have grown by 6.6% this year, reinforcing the strength of demand for premium real estate.
Increased household income
A welcome indicator of economic growth this year was the increase in average household income. By September this year, the average household income had increased by 9% year-on-year to reach around R95 000 a month. Bendall says average income levels of prospective homebuyers should keep pace with average home price increases to ensure access to the property market. “This increased purchasing power coupled with lower interest rates made homeownership more affordable.”
Women took the lead
We saw this year that almost 70% of all homeowners in South Africa are women buying property on their own or jointly with men. “And, the numbers suggest that more women are opting to buy on their own than ever before,” notes Bendall. Many of these women buyers were younger than 40, which suggests that they are prioritising their financial independence from a younger age.
“Traditional notions of waiting for white picket fences and wedding rings have given way to a new generation of financially empowered women who view property ownership as a cornerstone of independence and long-term security.” Just over 53% of BetterBond’s women applicants were younger than 40, compared with the almost 47% in the older cohort.
Homebuyers got older
Lightstone reports that South Africans are buying property later in life, with data showing that the percentage of buyers over 60 has doubled over the past 25 years. In contrast, younger buyers under 35 have declined from 45% in 2000 to just 30% this year. The share of buyers aged 35 to 60 has risen from around 50% to 70% over the same period. Interestingly, BetterBond’s data indicates that many first-time buyers now fall within this age group, with the average first-time buyer being 37 years old. While Lightstone cites affordability and saving capability as reasons for buying later, delayed life course changes such as later marriages and fewer children are also factors.
A buyers’ market
“Although house prices reached record highs this year, the modest 1.2% year-on-year increase – well below the 3% inflation rate – suggests that 2025 remained a buyer-friendly market.” The Absa Home Owner Sentiment Index reinforces this, showing that consumer confidence in the property market increased to 86% by the second quarter of the year, the second-highest score since the survey launched in 2015.
Broad economic recovery
Broader economic recovery, including improved business confidence, historic lows in producer inflation, and better infrastructure investment, bolstered real estate market prospects and investor confidence throughout the year. “By October, the rand had strengthened by more than 9% against the US dollar since January, outperforming almost every major currency,” says Bendall. SA’s removal in October from the FATF greylist has also consolidated the country’s reputation as a credible and reliable investment destination.”
Strengthened export growth, with high value-added exports to Europe rising by 24% year-on-year to R233 billion and a significant rebound in tourism arrivals reaching 1.3 million between January and July 2025, also point to an economy gaining ground.
Opportunities for growth
As the year draws to a close, South Africa’s housing market reflects a year of resilience and renewal. Lower interest rates, stronger household incomes, and a more robust lending environment have set the stage for sustained recovery, concludes Bendall. “The year’s steady rebound underscores the property sector’s role as both a driver and a mirror of broader economic recovery. If this momentum continues into 2026, the market looks poised to build on this year’s foundation of growth and confidence.”