A comparison between the change in the number of home loans granted for the 12 months to January 2024 and January 2025 confirms the extent of the turnaround in the residential property market, mortgage origination firm BetterBond said Tuesday.
The new Expropriation Act that has caused a public furore represented “business as usual” for the property sector at present, and although three regions have not yet fully recovered from the debilitating effect of record high interest rates, the majority of them have posted significant increases in home-buying activity, economist Dr Roelof Botha said in a note at the release of data by BetterBond.
The Free State and Northern Cape region had outperformed the rest in the recovery stakes, with the Western Cape in second position with a year-on-year increase of 35% in the number of home loans granted. A total of five regions recorded double-digit growth during the past 12 months.
The average home purchase price in January of R1.58 million was unchanged from the fourth quarter of 2024 but was 4% higher than in January 2024, driven by pent-up demand in the more affordable segments, BetterBond’s data showed.
Its analysis of a number of key indicators of residential property market activity had provided “ample evidence” that the market had turned the corner, BetterBond said.
Dr Botha said the latest decline in the prime overdraft rate of 25 basis points happened towards the end of January, so it's likely positive impact on house prices will only be visible in February and March.
He said about the signing into law of the new land Expropriation Act, that for now, property ownership in South Africa was secure and protected by a democratic Constitution that enshrines free enterprise principles.
He said the bottom line “is business as usual” as the new Act’s provisions were subject to section 25 of the Constitution, which had not been amended; expropriation could only be used as a last resort when all other attempts to purchase the property in question had failed, and the aim of the Act was to speed up infrastructure development.
BetterBond said first-time home-buyers experienced a steeper increase in average home prices, with the average R1.34m price in January 7.3% higher than a year earlier and 4.3% higher than the average for the last fourth quarter.
“There is little doubt pent-up demand for home ownership exists at the more affordable segments of the market and the latest interest rate cut should provide further impetus to average home prices in the months ahead,” BetterBond said.
The improvement in key data indicators of the housing market was not evenly spread on a geographical basis. The most significant improvement was the return to positive growth for the number of home loans granted, which had recovered from a sharp drop in 2023, induced by restrictive monetary policy.
“Fortunately, a rise in homebuyer incomes of 8.7% has played a key role in stabilising the homebuying market,” the company said..
BUSINESS REPORT