The South African property market in April 2025 reflects a cautious but steady recovery, with home loan data pointing to modest price growth and improving sentiment among buyers. Michael-Anne Abrahams of MyProperty Home Loans explains.
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According to the FNB House Price Index, home values increased by 2.2% year-on-year—marking the fastest growth in nearly two years. Despite this positive development, transaction volumes remain around 16% below pre-pandemic levels, suggesting that while buyer confidence is improving, overall market activity is still subdued.
First-time buyers still driving demand
First-time buyers continue to lead activity in the home loan market, accounting for 67.77% of all bond approvals in April 2025. This reflects a slight decline from 67.82% in April 2024.
- Average purchase price increased by 2.54% to R1,262,197
- Average approved bond rose by 0.75% to R1,046,110
- Average deposit grew to R216,088
- Loan-to-value ratio (LTV) increased to 98.32% (from 97.79%)
Improving lending conditions and competitive shopping
Michael-Anne Abrahams
Increased competitiveness among lenders is also evident, with the average approved LTV for all buyers rising to 98.30%, an increase from 97.74% in 2024, and the average interest rate easing slightly to prime +0.26%, compared to prime +0.29% in 2024.
This follows a drop in the prime lending rate to 11% earlier in the year.
However, bond approval from applicants’ own banks declined from 53.01% to 51.67%, indicating that buyers are increasingly shopping around for better deals, a trend that aligns with broader shifts toward financial caution and value-seeking behaviour.
This says Abrahams is a good thing for first-time buyers saying that “shopping around for home loans with the help of an experienced bond originator often leads to better rates, which in the long run can save you thousands of Rands.”
The market outlook
Overall, the data points to a market where affordability remains top of mind for buyers, especially first-time entrants. While deposits are growing, the willingness of banks to extend high loan-to-value ratios and slightly better interest rates is helping to keep the market accessible.
With expectations of further interest rate relief and potential changes to property-related policy, market conditions may continue to improve through the remainder of the year.
March 2024 to March 2025 comparison
MyProperty Home Loans also released home loan statistics comparing March 2024 to March 2025 – revealing significant shifts in the South African property market. Notably, first-time buyers now constitute 72.71% of the home loan application market, up from 71.34% the previous year, indicating a growing confidence among new entrants.
While the March National Budget created many pain points for South African households, it also gave homebuyers the ‘gift’ of increasing the transfer duty exemption threshold. With the reduced interest rate and no transfer duty below R1.2 million, the market is more favourable for first-time buyers compared to a year ago,
The average purchase price for first-time buyers increased from R1,188,663 to R1,215,522, while the average approved bond rose from R1,029,192 to R1,567,694. Despite these increases, the average deposit for all buyers saw a substantial rise from R159,471 to R352,173.
These trends align with broader market observations. The average age of first-time buyers has increased to 39, reflecting a shift towards older individuals entering the market.
The prime lending rate decreased from 11.75% to 11%, offering some relief to borrowers. Furthermore, own bank bond acceptance rates improved slightly from 52.24% to 52.61%, indicating a more favourable lending environment.
“The data reflects a resilient property market with first-time buyers leading the charge,” said Abrahams. “With improved lending conditions and increased consumer confidence, now is an opportune time for prospective homeowners to enter the market.”
For more information, visit myproperty.co.za/home-loans.
