The South African property market showed continued signs of a cautious recovery in April 2025, buoyed by modest home price gains, improving buyer sentiment, and a slightly more competitive lending environment.

While overall activity remains below pre-pandemic norms, key indicators suggest that confidence—particularly among first-time buyers—is gradually returning.

According to the latest FNB House Price Index, national home values grew by 2.2% year-on-year in April—marking the strongest annual increase in nearly two years. Though still relatively subdued, the uptick points to a stabilising market after years of muted growth.

However, transaction volumes are still lagging, sitting approximately 16% below pre-COVID levels. This underscores a still-fragile demand base, shaped by economic pressures and cautious consumer behaviour.

First-time buyers continued to dominate the home loan space, accounting for 67.77% of all bond approvals – slightly down from 67.82% in April 2024, but still historically high.

This demographic remains critical to market momentum, with affordability and access to credit key considerations.

Other lending metrics also showed modest improvement:

• Average purchase price: R1,262,197 (up 2.54% YoY)
• Average approved bond: R1,046,110 (up 0.75%)
• Average deposit: R216,088 (a notable increase, indicating stronger financial preparation)
• Loan-to-value (LTV) ratio: 98.32%, up from 97.79% last year

Lenders are becoming more competitive, with the average approved LTV ratio for all buyers rising to 98.30%—up from 97.74% in April 2024. Additionally, interest rates on approved home loans eased slightly to prime +0.26%, compared to prime +0.29% a year ago.

This follows the South African Reserve Bank’s earlier decision to lower the prime lending rate to 11%, providing some relief to prospective buyers facing cost-of-living pressures.

Despite this, the share of bonds approved by applicants’ own banks declined from 53.01% to 51.67%, reflecting an increasingly value-conscious market where borrowers are actively comparing offers across multiple institutions.

“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,” said Michael-Anne Abrahams of MyProperty Home Loans.

With inflation continuing to ease and further interest rate cuts on the table for later this year, analysts suggest that buying conditions could improve even further in the second half of 2025.

Additionally, ongoing discussions around potential revisions to the Transfer Duty threshold and housing subsidies for lower-income buyers could inject new life into the affordable housing segment if implemented.

While risks remain—particularly around employment stability and energy supply constraints—the property market appears to be on firmer footing, bolstered by first-time buyers, lender support, and the prospect of more favourable financial conditions.