Major shift in South Africa’s residential property market

First-time homebuyers, particularly individuals below the age of 35, are taking up a larger share of South Africa’s property market. 

This has increased demand for apartments and houses in the country, nudging prices higher in major metropolitan areas. 

Standard Bank revealed this as part of its Youth Barometer report, which used data from its three million personal and private banking clients aged 18 to 35. 

The report aimed to analyse the financial behaviour and health of young South Africans to inform the products offered by the bank and the services given to individuals. 

This segment is vital for South Africa’s major banks as it represents the feeder group into their private banking offerings, which tend to be more lucrative as clients’ earnings grow. 

It is much easier for a bank to keep a client within its ecosystem than to try to win over clients from competitors later on in their financial life. 

One of the key aspects of the report was the financial behaviour of younger clients towards home ownership and their willingness to take on debt. 

Data from Standard Bank’s Home Services division showed that around 40% of all new home loan enquiries at the bank come from clients under the age of 35. 

It said that this reflects a strong and growing interest in property ownership among younger clients despite broader affordability challenges and rising living costs. 

This makes the under-35 segment a key growth area in South Africa’s residential property market, signalling a shift towards younger buyers. 

In particular, first-time homebuyers are driving demand for housing in the country, making up a significant portion of Standard Bank’s new home loan applications. 

Between January 2023 and April 2025, 74% of all application volumes were from first-time homebuyers. This trend has accelerated since the second half of 2025, with an average of 76% since then. 

The growing share of young clients and first-time homebuyers within Standard Bank’s home financing volumes can be seen in the graph below. 

Going big or staying home

Standard Bank also revealed data regarding the size of the home loans young South Africans are applying for. 

This indicates that buyers under 35 have an average loan approval amount of R1.2 million for a 20-year term, with 70% of applicants having a loan-to-value (LTV) ratio of 100% or higher. 

In comparison, older buyers are approved for larger loans, averaging close to R1.5 million, with 45% approved at loan-to-value (LTV) ratios of 100% or more, and 75% approved for 20-year terms.

This reflects the affordability realities facing younger buyers: higher LTVs suggest lower deposits, while longer loan terms are likely used to manage monthly instalments. 

Young buyers are stretching to get onto the property ladder but remain within acceptable risk levels. Their higher LTVs are also a function of Standard Bank’s efforts to support first-time homebuyers. 

At Standard Bank, first-time buyers now qualify for up to 108% loan values, subject to risk assessment. This helps first-time buyers cover upfront costs.

On average, young buyers spend a greater portion of their income on mortgage repayments than older customers. 

This is represented by the Instalment-to-Income (ITI) ratio, a measure of how much of a borrower’s income goes toward their monthly home loan instalment. An ITI of over 30% is a sign of commitment, but also of tighter financial margins. 

While this may pose risks in a high-interest-rate environment, it also underscores the importance of responsible lending and education to help young people plan for future rate adjustments and life-stage expenses. 

One concerning piece of data is the rise in no-deposit home loans, indicating that young South Africans are struggling to save and are willing to incur more debt for independence. 

The bank also revealed that younger South Africans tend to stretch their first home loan in anticipation of greater income in the future, which can better absorb the repayments. 

The charts below show the average size of loans given to young South Africans compared to older clients.