ooba Home Loans’ Q3 2023 oobarometer reveals a property market shaped by high interest rates, with first-time homebuyers adapting to increased deposit requirements and banks remaining competitive with below-prime rates. First-time buyers represent 48% of applications, slightly below 2022 levels, reflecting affordability challenges. Nonetheless, approval rates for ooba applicants held strong at 82.9%, and the average interest rate was 0.44% below prime—encouraging buyer activity, particularly among those with good credit scores and deposit-backed applications.

The average first-time buyer deposit rose 25.9% year-on-year to R114,323 (10.2% of purchase price), while overall deposit size also grew to 9.7% of the purchase price. Despite high rates, buyers are still prioritising larger deposits to reduce loan repayments. In addition, first-time buyer activity remains concentrated in affordable regions, particularly the Free State, KwaZulu-Natal, Mpumalanga, and Gauteng South and East Rand, where average purchase prices are under R1 million.

While the average purchase price has increased nominally (up 1.5% year-on-year to R1,423,663), market activity is down, with loan applications decreasing by 25% from 2022. Generational wealth investments are notable, with a 34% increase in home-loan applications for investment properties, especially in the Western Cape. Looking ahead, ooba expects a market recovery as interest rates soften, with more buyers likely to enter the market. Rhys Dyer, ooba CEO, advises buyers to shop around for competitive loans and save for deposits to counter potential rate fluctuations.