According to ooba Home Loans’ Q2 2024 report, South Africa’s property market is on the path to recovery, driven by an expected interest rate cut and political stability under the Government of National Unity (GNU). While property prices saw modest nominal growth (2.3% nationally and 2.7% for first-time buyers), inflation remains a key challenge. The Western Cape showed the strongest property price growth (7.8% for first-time buyers), while KwaZulu-Natal experienced the largest decline.

A notable trend is the increased activity among young homebuyers aged 18-25, who are leveraging property as an investment strategy. This age group saw a 30% increase in the average purchase price over five years, with buyers aged 26-30 registering the strongest annual price growth at 4.2%. Conversely, older homebuyers (37 and above) are paying 2.1% less than last year due to financial pressure and life-stage downscaling.

First-time homebuyer activity has declined, accounting for 46% of applications, as potential buyers wait for more favourable interest rates. However, when they do purchase, first-time buyers are spending more, indicating that they are saving longer to reduce monthly repayments. Banks have also softened deposit requirements, with the national average deposit decreasing by 23.8% year-on-year.

Investment property demand, particularly in the Western Cape, has seen a significant rise, with younger buyers increasingly viewing property as a wealth-building tool. The property market shows promising signs of recovery, with banks remaining committed to lending and competing for business, even in a challenging interest rate environment.