It is turning out to be a good year for those in the property market. With the interest rate dropping three times this year—January, May, and July—an upturn in home loan activity was stimulated, says Rhys Dyer, CEO of the ooba Group.
Evidence comes from the oobarometer for 2025’s Q2 period, where six key findings show improvements across all major indicators:
Home loan application volumes and values are up by 11% and 18.5%, respectively (YoY).
Borrowing costs have dropped to records not seen in years, at prime less 0.67 on average.
The national purchase price average has risen by 3.9%.
The average homebuyer is now one year older—aged 40.
First-time homebuyers are spending more (up by 3.5% YoY), with 59% of these buyers purchasing without deposits.
Average homebuyer deposits have declined by 13.5% YoY but remain at a commendable 14.1% of the purchase price.
“Our Quarter 2 2025 (Q2 ’25) oobarometer highlights an upturn in home loan activity, primarily driven by improved affordability—where income growth outpaces house price inflation in some regions—and the reduced cost of borrowing,” says Dyer. He adds that in addition to the 1% year-on-year reduction in the cost of borrowing, the banks remain highly competitive, offering some of the largest discounts to the prime lending rate seen in recent years.
“These culminating factors have yielded positive outcomes, with ooba Home Loans’ application volumes rising by 11% year-on-year and the total value of these applications increasing by 18.5%,” continues Dyer. “These figures signal a decisive rebound from the post-pandemic slump that bottomed out in Q4 ’23.”
Ooba is indicating that 2025 “tells a story of cautious recovery and genuine opportunity” and predicts that by the end of this year, the interest rate may reach 10,5%.
Currently a R1.5-million home loan now costs about R900 less per month than it did in September 2024. That’s R10,800 annually back in your pocket, says ooba. There may be more to come as well if home loan lenders continue to be competitive in fighting for market share.
Average property purchase price
Alongside are homebuyers who are spending more, with the average property purchase price now at R1,695,257.
The areas showing the most substantial increases in average purchase prices are in the Free State and Tshwane. “From January to June ‘25 (H1 ‘25), the Free State and Tshwane saw significant year-on-year growth in the average purchase price paid—up by 12% (R1.16-million) and 10.1% (R1.77-million), respectively,” says Dyer. “Tshwane also registered the highest growth in average monthly gross income for the same period, up by 15.9% to R78,713—highlighting improved affordability as a key driver in the region’s improved performance.”
It’s somewhat different for the country’s most expensive region, the Western Cape, which recorded a modest 3.3% year-on-year increase in the average purchase price, bringing it up to an average of R2.39-million, while Johannesburg’s purchase price rose by 5% to R1.65-million (H1 ’25). “With the exception of Gauteng South & East, every region recorded an increase in the average purchase price over the quarter from year-earlier levels—a promising indicator for the market at large,” says Dyer.
Deposits
Even home loan deposits are drifting lower. In Q2 ‘25 relative to the same period last year, these went down by 13.5% year-on-year to R239,545. Despite the drop, deposits still represent a substantial 14.1% of the average purchase price.
Regionally, Dyer shares that the Western Cape recorded the highest average deposit for the quarter, at 20.3% of the purchase price, while Mpumalanga came in lowest at 7.9%. “Tshwane, the Eastern Cape, Johannesburg, Limpopo, and KwaZulu-Natal posted deposit values ranging from 12.2% to 14.0% of the purchase price—reflecting strong saving habits and a clear understanding of the importance of putting down a deposit on a home loan,” he adds.
First-time homebuyers
First-time homebuyers (aged 35 on average in Q2 ‘25) are responding positively to the current home loan environment, claims ooba, with their spend of 3.5% more on homes in Q2 ‘25 than in Q2 ‘24 (at R1,239,413). Although the percentage of first-time homebuyers showed only a modest year-on-year increase of 1% to 46% in Q2 ’25, Dyer expects demand from this segment to gradually rise following July’s expected interest rate cut. “Banks are actively stimulating this market segment by offering attractive incentives, such as zero-deposit and cost-inclusive home loans,” he notes. 59% of first-time homebuyers purchased without a deposit (100% home loans), and 10.5% secured financing that also covered transfer and bond registration costs. Dyer adds that the overall approval rate in this segment for home loans with a loan-to-value (LTV) ratio of 100% or more still reflects a very strong 80.8% in Q2 ’25—slightly lower than the 81.7% recorded in Q2 ’24.
“More South Africans can step into the property market with confidence, knowing that all key indicators are gaining ground and that the banks are willing to support them,” Dyer says.“We anticipate stronger demand from first-time homebuyers, in particular, over this period and look forward to supporting them on their journey to homeownership.”
