Good news for South African homeowners

South Africa’s housing market is steadily recovering, with rising house price inflation, renewed buyer confidence, and strong first-time buyer demand.

Despite the recent interest rate pause announced in September 2025, Dr Andrew Golding, chief executive of the Pam Golding Property group, said South Africa’s housing market recovery remains firmly on track.

The market is continuing to build momentum amid sustained positive sentiment. “National house price inflation is also gaining ground, rising to 4.2% in August 2025, according to the revised Pam Golding Residential Property Index,” Golding said.

“Encouragingly for investors and existing homeowners, subdued consumer price pressures supported real (inflation-adjusted) house price growth of 0.9% in August, marking six consecutive months of positive gains.”

By price segment, the upper band above R3 million posted the strongest growth at 5.5% in August. This was followed closely by the R2 million to R3 million band at 5.4%, while homes priced below R1 million rose by 3.3% over the same period.

“A broad-based recovery is also evident across South Africa’s major metro markets, with Cape Town leading the pace and Tshwane spearheading the rebound in Gauteng,” Golding said.

“The coastal price premium continues to widen, while freehold properties are registering a slightly stronger recovery in prices than sectional title units.”

Golding added that market activity remains sustained across regions and price bands, including the luxury segment, highlighting renewed buyer confidence.

Even during the typically quieter winter months, the property market in areas like Cape Town’s Atlantic Seaboard remained hot.

In June 2025, Pam Golding reported a record sales turnover of R240 million in the Atlantic Seaboard for that month alone.

“In-demand locations, particularly those offering strong lifestyle appeal, continue to attract buoyant activity, underpinned by semigration trends and access to competitively priced finance,” he said.

Golding explained that the property market’s resilience is all the more notable against the backdrop of a subdued economy.

Positives for home buyers

While further interest rate cuts would provide additional stimulus, Golding said the market is already benefiting from a number of positives.

The combination of muted inflation, lower petrol prices, and moderate interest rate relief to date are easing household debt burdens and drawing first-time buyers back into the market.

“The banking sector is supporting the housing market via attractively priced loans, elevated approval rates, and reduced deposit requirements,” he said.

According to ooba Home Loans, the average national concession relative to prime in the year to August 2025 was -0.66%, compared with -0.55% a year earlier. This translates into more competitive finance options for buyers.

Ooba Group CEO Rhys Dyer explained that, in addition to the reduced cost of buying, banks remain highly competitive, and are offering some of the largest discounts to the prime lending rate seen in recent years.

“Although lending terms differ across regions, home loan pricing has improved in all areas compared with 2024,” Golding said.

“Deposit requirements also continue to ease – the average national deposit as a percentage of purchase price fell to 14.2% in August 2025, down from 16% in February this year.”

In 2025, deposit requirements for first-time buyers slipped below 10%. As a result, demand from first-time buyers has strengthened further, rising to 47.7% of all applications received by ooba Home Loans in July/August 2025.

“Recent rate cuts and still subdued inflation are expected to further support first-time buyer demand during the remainder of the year,” Golding added.

“Looking ahead, we remain optimistic that the recent pause represents only a temporary break in South Africa’s interest rate easing cycle, with the likelihood of further cuts either later in 2025 or into 2026.”