SA’s residential property market is showing renewed momentum, with home loan applications and average house prices climbing steadily as interest rate cuts begin to filter through the economy.
According to BetterBond’s August property brief, home loan applications increased 14% quarterly in July and rose 12% year on year.
The growth brings application volumes to their highest level since late 2022, and just 8% below the postpandemic peak, signalling a notable rebound in buyer sentiment and affordability.
“The July interest rate cut has reignited demand in the affordable and midmarket segments. With inflation easing and confidence improving, the average purchase price surpassed R1.6m for the first time,” said BetterBond’s national head of sales Bradd Bendall.
There has also been a marked shift in homebuying patterns by age group. Millennials recorded the strongest year-on-year growth in average purchase price, rising 3.9% to R1.54m.
Buyers in their forties also broke through the R1.75m mark on average, reflecting a growing appetite for larger family homes.
Angela Walker, Pam Golding Properties’ Underberg area principal, recently said demand was rising for free-standing homes on large 2,000m²-4,000m² plots in Underberg and nearby Himeville.
Priced R1.5m-R4m, these properties were attracting younger families relocating from cities such as Joburg and Durban, with most spending R1.5m-R2m. Retirees typically buy closer to the R3m level.
BetterBond said by contrast the only demographic to register negative real house price growth was the 51-60 age group, suggesting a broader shift in demand towards younger and mid-career buyers.
BetterBond’s data also points to a shift in loan activity across price bands. Demand for homes priced under R500,000 has declined, with the share of loans in this category falling 5.7% over the past year.
“More than half of all loans granted were between R500,000 and R1.5m, with the R500,000 to R1m segment proving most active. At the higher end, loans for properties above R3m increased by 7%, reflecting renewed confidence among wealthier buyers,” the report reads.
While activity at the upper end continues to rise, affordability at the lower end remains a concern, particularly in light of recent increases in deposit requirements.
Many who might have upgraded to a larger or more upmarket home are instead choosing to renovate. This is evident in the increasing share of building plans accounted for by alterations and additions, which rose from 25.4% in 2016 to 31.5% by May 2025.
The effect of previous interest rate hikes and a cautious outlook among some households continued to shape decisions about housing investment, according to the report.
Between January and May, R18.6bn worth of residential buildings were completed, with strong regional disparities.
The Western Cape led with R4.4bn — up 20% year on year — followed by Gauteng at R4.1bn and KwaZulu-Natal at R1.6bn.
Limpopo showed the highest growth off a low base, while the Eastern Cape and Mpumalanga contributed the least.
The data points to potential supply constraints in major economic hubs, where resilient demand and limited new stock may push prices higher.
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