Contrary to a prevailing belief among estate agents that young South Africans struggle to afford property, Standard Bank data indicates a resurgence in first-time homebuyer activity. The latest FNB Estate Agents Survey shows a steady decline in mortgage acquisitions by buyers under 35 since 2010, except for a brief increase in 2020/21 due to pandemic-induced interest rate cuts. The survey also highlights that incomes have not kept pace with rising house prices, with 39% of agents in 1H24 reporting that incomes have fallen “far behind” housing costs, up from 24.5% in 2H21.

Tighter lending standards have made it more challenging for first-time buyers to secure 100%+ loan-to-value (LTV) mortgages, dropping from 72% in 1H21 to 66.5% in 1H24. Personal savings reliance has also decreased, leading many first-time buyers to seek unsecured loans and government subsidies. The use of unsecured loans rose from 2% in 2H21 to 11.5% in 1H24, and reliance on the First Home Finance (FHF) subsidy doubled from 3.5% in 2H21 to 6% in 1H24.

Standard Bank reports that nearly half of all home loans registered in May were for first-time buyers, with increased applications in April and May following a decline in late 2023 and early 2024. The bank approved an average of 50% of first-time homebuyer applications in the past year, with the average loan value at R975,000. Four in ten first-time buyers provided deposits, averaging 24% of the selling price. Gauteng, Western Cape, and KwaZulu Natal are the top provinces for first-time buyer activity.

While tighter lending conditions and economic challenges persist, signs of potential interest rate cuts and economic reforms may further support first-time buyers and revitalise the housing market.