South Africa’s property market is showing early signs of recovery in Q3 2024, driven by first-time homebuyers responding to anticipated interest rate cuts and improved economic conditions. According to ooba Home Loans, first-time buyers represented 51% of September 2024 applications, reflecting renewed confidence. Their average purchase price rose to R1,155,056, up 3.4% from Q3 2023. The Western Cape leads with the highest average purchase price (R1.57 million), while regions like Gauteng South & East and the Free State remain the most affordable for this segment.

Deposit requirements have eased, with the average deposit size for first-time buyers down by 2.9% year-on-year to R114,161. Loan-to-value (LTV) ratios are high, particularly in the Western Cape at 96.4%, compared to the national average of 89.9%. Zero-deposit bond applications, while down from 2020 highs, remain significant at 54.7%, suggesting greater accessibility for buyers without deposits.

Self-employed buyers are also gaining traction, accounting for 13.5% of applications, up from 12% in Q3 2023. Banks are competing aggressively, offering lower deposit requirements, attractive rate concessions (averaging 0.55% below prime), and maintaining high approval rates for pre-qualified buyers (90.5%).

The Western Cape continues to dominate buy-to-let investments, comprising 31.1% of applications. Nationally, house prices have risen 1.7% year-on-year, with recovery varying by region. Positive economic developments, competitive lending, and rate cuts are expected to bolster demand further, positioning Q4 2024 and early 2025 as critical periods for market growth.