South Africa’s property market is experiencing a recovery in 2024 following a three-year decline, largely driven by rising interest rates and the cost of living pressures. According to BetterBond’s October Property Brief, home loan activity has picked up as wealthier buyers re-enter the market and the possibility of interest rate cuts grows. After significant interest rate hikes by the South African Reserve Bank, which raised rates by 475 basis points since November 2021, home loan repayments became substantially more expensive, reducing market activity.

The residential property market, particularly first-time buyers, faced challenges as interest rate increases pushed monthly repayments higher. In early 2024, many homeowners struggled with repayments, leading to a 36% year-on-year rise in home loan defaults, according to the Prudential Authority.

Despite these challenges, BetterBond’s data shows an improvement, with home loan applications rising 4.5% in the third quarter of 2024 compared to the second quarter, and 1.6% year-on-year. Standard Bank also reported signs of a market turnaround, noting the residential property market’s historical resilience. The decline in average home purchase prices has slowed as buyer confidence strengthens, aided by renewed economic optimism and political stability following the May 2024 elections.

However, BetterBond warns that high interest rates—currently at a 14-year high—continue to limit market expansion. While interest rates have entered a downward cycle, significant improvements are not expected in the short term, though 2025 could see stronger home loan activity if economic conditions continue to stabilise.