Figures from BetterBond’s January Property Brief report reveal South Africa’s housing market is quietly tipping back in buyers’ favour, with falling bond repayments, easing deposit hurdles and the prospect of further interest rate cuts positioning 2026 as a potential turning point for aspirant homeowners.
Lower deposit requirements — particularly for first-time buyers — combined with easing financial pressure and more favourable lending conditions are improving the prospects of those who have been waiting on the sidelines.
Bradd Bendall, national head of sales for BetterBond, said many households are now viewing 2026 as the right time to buy.
Citing BetterBond’s January Property Brief, he said several factors point to a market recovery, including a cumulative 150-basis point drop in the prime lending rate since the end of 2023, “which means that homeowners are paying considerably less each month on their bond”.
On a R2m home loan, monthly repayments are now R19,633 — about R2,000 less than in 2023, when prime stood at 11.75%.
The report highlighted the rand’s performance as another positive driver.
“A robust rand and cheaper imports are helping to keep inflation in check, paving the way for possible interest rate cuts as soon as the end of January when the Monetary Policy Committee holds its first meeting for 2026,” Bendall said.
Other supportive factors include projected GDP growth improving on the near-zero expansion of recent years, mining remaining a key export driver and stronger global growth boosting prices for key commodities.
Bendall added that rooftop solar is reducing grid reliance and boosting yields for property investors, particularly in high-growth areas such as the Western Cape.
By the third quarter of 2025, BetterBond’s bond applications were up 14.6% year on year — the highest level in three years — and 26% above the lows of 2023.
“As expected, bond activity dipped during December, traditionally a quiet period for the residential property market. But applications still rose 8.9% year on year,” he said.
He noted that applications for homes priced above R3m jumped 44%, with further rate cuts expected to trigger another surge.
The Western Cape, Mpumalanga, KwaZulu-Natal and Greater Pretoria were the only regions to outperform inflation. The Western Cape maintained the highest average house price at R2.1m — up 7.3% year on year compared with the national average increase of 1.7%.
Average house prices in the Western Cape are about 40% higher than the national average of R1.6m and nearly double those in North West, the Free State and the Northern Cape.
Mpumalanga’s average home price rose 7% in 2025, while Johannesburg’s northwestern suburbs recorded a decline in nominal price growth, “most likely because of concerns about poor service delivery standards in the region”.
Bendall said the gap between deposit requirements for first-time and repeat buyers narrowed significantly towards the end of last year. While first-time buyer deposits remain about 30% higher than in 2021, banks are easing lending requirements, allowing more new buyers into the market.
Stephen Whitcombe, MD of Johannesburg property group FIRZT Realty, agreed that conditions are becoming increasingly favourable.
“Many economists are predicting that rates will come down by 100 to 150 percentage points over the next 12 months. Even modest cuts can have a meaningful impact. Lower interest rates improve affordability, increase buyers’ borrowing capacity and boost confidence,” he said.
He cautioned, however, that rate relief must be weighed against rising demand for well-located homes, particularly in secure estates and established urban nodes.
“Demand is starting to outstrip supply in many parts of Johannesburg, placing upward pressure on prices even as borrowing conditions improve. Waiting for significantly lower rates could mean paying higher purchase prices,” he said.
Whitcombe added that the most advantageous conditions often occur during periods of gradual rate cuts, when buyers gain better access to finance and sellers benefit from steady, sustainable price growth.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.