The South African housing market, stagnant due to steady interest rates for 14 months, could soon see a rebound as experts anticipate a rate cut in Q4 2024. Gavin Lomberg, CEO of ooba Home Loans, expects a 25 basis points reduction, driven by moderating local and US inflation. While a return to Covid-era low rates of 7% is unlikely, Lomberg believes even a modest cut could increase homebuyer confidence, stimulate market activity, and encourage first-time buyers to re-enter the market.

Lomberg predicts increased competition among homebuyers, benefiting sellers with more competitive offers and possibly higher asking prices. Young buyers, particularly those aged 18–36, are expected to respond positively, while older buyers (37+) are more cautious due to elevated living costs. Investment property demand remains robust, with Gen Z buyers significantly increasing their interest in buy-to-let properties, rising from 3.0% in 2019 to 9.2% in 2024.

First-time homebuyers currently make up 46% of ooba’s customer base, down from 56% during the 2020 low-interest period, highlighting their sensitivity to rate fluctuations. However, Lomberg expects this trend to reverse once rates drop. Banks have maintained favourable lending conditions despite higher interest rates, with steady approval rates and competitive offers. Lomberg encourages buyers to adopt a long-term view, considering current market conditions, including motivated sellers and supportive lending practices, as they navigate the changing interest-rate environment.