Latest news with #oobaHomeLoans
Zawya
06-08-2025
- Business
- Zawya
South Africa: Rate cuts boost savings, drive housing demand
The banks remain committed to supporting first-time homebuyers and it is expected that their presence in the market will continue to strengthen. This was the sentiment of Rhys Dyer, chief executive officer of the ooba Group who welcomed the announcement by the South African Reserve Bank's (Sarb) that it would cut repo and prime lending rates by 25-basis points for a second consecutive time. Now at 7% and 10.50% respectively, borrowing costs are officially 1.25% lower than they were a year ago, a welcomed result that Dyer believes will continue to support homebuyers and homebuying activity. 'At the current prime lending rate of 10.50%, the monthly repayment on a home priced at our Q2 '25 average approved bond size of R1,455,712 equates to R14,534 over 20 years - down from R15,776 just a year ago. Savings like these add up to almost R15,000 extra in a homeowner's pocket over the course of a year.' Confidence trumps deposits Dyer adds that consumers' improved affordability is reflected in ooba Home Loans' latest figures. 'In Q2 '25 we saw an 11% year-on-year increase in home-loan applications and a 18.5% increase in the total value of these applications,' he shares. 'This points to ongoing market recovery, increased buying power and growing buyer confidence.' Interestingly though, deposits - a key indicator of consumer liquidity - have drifted lower, down by 13.5% year-on-year for the average homebuyer and 1.9% for first-time homebuyers (as at Q2 '25). 'We do however believe that these figures are reinforced by strong bank lending activity, including attractive incentives like zero-deposit loans and some of the highest discounts to the prime lending rate seen in years,' says Dyer, highlighting an average interest rate of prime less 0.67% for its customers in Q2 '25 – a 0.11% reduction year-on-year. Outlook supports cuts While the country has five rate cuts under its belt since September 2024, Dyer believes that there is still scope for a further reduction. 'Today's news is certainly welcomed by the residential property sector,' he says. 'As it stands, South Africa's economic outlook provides room for monetary easing. Inflation remains anchored at the lowest levels seen in four years (currently 3%) and the country has benefitted from a series of petrol price cuts, with another anticipated in August.' And despite global uncertainty, Dyer believes that the demand for homes will build in light of the repo and prime lending-rate cut and the prospect of a stable, lower interest-rate environment. 'The market has responded positively this year – even in the face of trade-policy volatility – and we expect this to continue.' Fuelling the positive momentum is news of a second consecutive year of real salary growth, with increases of 5% to 6% outpacing last year's inflation rate of 4.4% and the projected 3.5% for this year. 'This is reflected not only in the higher value of home-loan applications in Q2 '25, but also in our January -June 2025 salary data, which shows year-on-year growth in excess of inflation in average monthly gross income across four of the nine regional housing markets.' Cautious buyer comeback But the question remains, will rate cuts further entice first-time homebuyers? Fuelled by recent rate cuts, first-time homebuyers are making a cautious but steady return to the market. 'While this segment has only experienced marginal year-on-year growth in Q2 '25 - up just 1% to 46% - it is spending 3.5% more on homes year-on-year,' shares Dyer. Notably, first-time homebuyers appear to be more financially prepared than in the past. 'In Q2 '25, the average deposit rose to 10.4%, a significant increase compared to Q2 '20 at 8.45%. This indicates that they are prioritising savings and are actively taking steps to pay down their home loans.' For those struggling to save, the good news is that the banks are stepping in. 'In Q2 '25, 59% of first-time homebuyers secured a home without a deposit, while 10.5% purchased a home without a deposit or access to funds for transfer and bond costs,' says Dyer. Reflecting on whether this group could return to their May 2020 peak, Dyer remains measured. 'That surge was driven by a record-low 7% interest rate - a level that we're unlikely to see again anytime soon.' All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
The Citizen
01-08-2025
- Business
- The Citizen
Lower borrowing costs open doors for homebuyers
The latest home loans data, released by ooba Home Loans, South Africa's foremost home loan comparison service, points to improvements across all major indicators, set against the backdrop of a lower interest rate environment. '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 Rhys Dyer, CEO of the ooba Group. 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.' Source: ooba Home Loans Improved Affordability Spurs Higher Homebuyer Spending Q2 '25 data shows that homebuyers (now one-year older year-on-year – aged 40) are spending more, with the average property purchase price increasing by 3.9% year-on-year – now at R1,695,257. Regionally, Dyer highlights substantial increases in average purchase prices, especially 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. 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.' Meanwhile, the country's most expensive region, the Western Cape, 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.' Bank Lending Ramps Up In Q2 '25, ooba Home Loans achieved an average interest rate of prime less -0.67% for its customers – a notable improvement of -0.11% on Q2 '24 and -0.12% on Q1 '25. While all regions enjoyed attractive interest rate discounts in Q2 '25, the Western Cape achieved the highest average discount, at prime less -0.96%, followed by the Eastern Cape at -0.74%. Year-on-year, Mpumalanga and Tshwane saw the biggest improvements in their pricing, with rate discounts up by -0.19% and -0.17%, respectively. Source: ooba Home LoansAdding to robust bank lending activity, approval rates for ooba Home Loans' customers remained elevated in Q2 '25 at 82.6% – flat on Q2 '24, while the ratio of applications declined by one bank but approved by another increased to 45.7%, highlighting the importance of shopping around to multiple banks for a home loan. Deposits Drift Lower Home loan deposits drifted lower in Q2 '25 relative to the same period last year, 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. New Horizons for South Africa's First-Time Homebuyers First-time homebuyers (aged 35 on average in Q2 '25, unchanged from year-earlier levels) are responding positively to the current home loan environment, spending 3.5% more on homes in Q2 '25 than in Q2 '24 (at R1,239,413). And 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. He 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. Buy-To-Let Activity Maintains Momentum National demand for buy-to-let properties remains steady, accounting for 12.6% of total applications for H1 '25 – a slight increase from 12.2% over the same period in 2024. 'The Western Cape continues to garner strong interest, with demand holding steady at around 31% of total applications, ' says Dyer. And while investment demand in the Eastern Cape eased to 12.2%, down from a peak of 20% in December '24, the region maintains a solid share of the market. Looking ahead, Dyer believes there is a strong likelihood of another interest rate cut in July – a development that will play a key role in driving a successful second half of the year. '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. We anticipate stronger demand from first-time homebuyers, in particular, over this period and look forward to supporting them on their journey to homeownership.' Issued by: Jess Gois
The Citizen
23-06-2025
- Business
- The Citizen
Tips for first-time homebuyers to get a foot on the property ladder
Tips for first-time homebuyers to get a foot on the property ladder The Western Cape remains one of South Africa's most sought-after regions for property investment, attracting strong interest from both local and international homebuyers. However, for first-time homebuyers, especially those looking at Cape Town, homeownership is a challenge as the province records the highest average purchase price. Still, data reveals that activity in the entry-level market persists, suggesting that many homebuyers are finding creative ways to get a foot on the property ladder. According to the latest oobarometer data from ooba Home Loans, the Western Cape's average purchase price in Q1 2025 was R2.33m – well above the national average of R1.66m. Yet, the province continues to draw first-time homebuyers, with the demand for property in the region showing no signs of slowing. 'We're seeing many young professionals and investors gravitating towards the Western Cape for its lifestyle, infrastructure and perceived safety, but affordability in the metro remains a challenge, especially for those trying to enter the market for the first time,' explains Grant Smee, CEO of Only Realty Property Group. Who Is Buying in the Western Cape, and Where? Lightstone data shows that 40% of the Western Cape's housing stock is priced under R750,000, and while appearing to be a more accessible price point, most of these properties can be found in smaller towns and rural areas. 'Investment properties are also in high demand, with the Western Cape recording a year-on-year increase of 0.5% to reach 12.9% in the first quarter [ooba Home Loans]. There is a growing trend of first-time homebuyers purchasing in the Boland and Overberg regions in smaller, outlying towns,' says Smee. 'These areas offer a more balanced lifestyle and slightly more accessible pricing, while still benefiting from the broader Western Cape infrastructure.' He says entry-level homebuyers investing in Cape Town's CBD are also increasingly choosing more affordable micro-apartments and sectional title units in high-density, mixed-use developments: 'These offer security and lifestyle perks like on-site retail, communal workspaces and gyms.' Attracting Foreign Investors Meanwhile, the Western Cape remains a top choice for foreign homebuyers, with its global appeal and in-demand lifestyle at comparatively more affordable prices than elsewhere. However, Smee notes they're investing in a higher price bracket. 'According to Lightstone data, the province leads in luxury price bands, with international homebuyers accounting for over 40% of purchases above R10m, around 25% in the R5m to R10m range and approximately 15% in the R3m to R5m bracket.' He adds: 'Compared to global cities, the Western Cape offers strong value. For instance, the average price of a home in one of the region's upmarket suburbs sells for around R10m. To purchase an apartment in London – with considerably less living space – homebuyers will pay upwards of R12m.' The Australian Property Investor also highlighted South Africa's comparatively low housing prices, with South Africans paying around R17,000 per square metre for a median-priced home, compared to Australia's R113,000 for the equivalent. Alternatives for First-Time Buyers Smee notes that while the Western Cape remains a strong performer in the property market, savvy buyers are increasingly exploring outlying regions that offer better value for money than central Cape Town. Areas such as the West Coast, the Garden Route, and the northern and southern suburbs present attractive alternatives. 'The Western Cape's so-called 'Zoom' towns – so-called for their remote working appeal—include Pringle Bay, Betty's Bay, Kleinmond, Malmesbury, Hermanus, and Gansbaai,' he explains. 'These areas provide easier entry points for buyers and remain within comfortable reach of Cape Town.' However, he adds that excellent opportunities exist beyond the Western Cape as well. 'Mpumalanga, for instance, is currently leading the pack when it comes to home loan applications from first-time buyers [ooba Home Loans]. Nelspruit, in particular, is booming with new estate developments that offer a secure, lock-up-and-go lifestyle, community atmosphere, and budget-friendly pricing.' Gauteng also continues to hold strong appeal. 'Popular nodes like Waterfall, Bryanston, and Hyde Park are drawing interest from buyers seeking well-established infrastructure and upscale living,' he says. Meanwhile, KwaZulu-Natal's North Coast – most notably Umhlanga, Ballito and Salt Rock – has become a magnet for investment. 'Over the past decade, this region has experienced massive growth, with estate developments, excellent schools, security, and community-driven living making it an increasingly worthwhile investment,' he adds. The Eastern Cape is quietly gaining momentum, too. Towns like Kenton-on-Sea and Jeffreys Bay are becoming hotspots for short-term rental investors, thanks to their appealing lifestyle offerings and growing popularity. 'These regions combine access to economic centres with strong lifestyle appeal, without the Cape Town price tag,' Smee explains. 'For buyers willing to expand their horizons beyond the Western Cape, there are standout opportunities, many in secure estates or fast-growing nodes. And with many of these areas doubling as holiday destinations, they open the door to 'reinvestment' opportunities, whether for short-term letting or longer-term leasing.' Practical Tips for Accessing the Market 'For homebuyers determined to get a foothold in the Western Cape property market, there are many options available,' he notes. 'This investment is well worth it too as the average growth of property in the province is around 7.4%.' He shares his top tips for those wanting to get a foot on the property ladder as follows: Enter into a joint home loan: Co-buying with a friend, partner or sibling can boost affordability and borrowing power. Co-buying with a friend, partner or sibling can boost affordability and borrowing power. Save smart and plan long-term: Set clear savings goals and budget realistically for transfer and attorney fees. Set clear savings goals and budget realistically for transfer and attorney fees. Start on the outskirts: Neighbourhoods just outside key metro areas often offer more accessible prices and are poised for growth. Neighbourhoods just outside key metro areas often offer more accessible prices and are poised for growth. Buy a fixer-upper: Properties in need of a bit of work can often be negotiated at lower prices and renovated over time. Properties in need of a bit of work can often be negotiated at lower prices and renovated over time. Buy-to-let as a stepping stone: Purchase an investment property in a growing node while renting where you live. 'The Western Cape is a great place to invest, but it could require a bit more creativity and long-term thinking for first-time homebuyers to make it work. Alternatively, if the Western Cape doesn't meet your criteria, regions like the Eastern Cape, KwaZulu-Natal and Mpumalanga have potential. It's not about compromising your goals, but rather being strategic,' says Smee. Issued by Jess Gois
The Citizen
23-05-2025
- Business
- The Citizen
Rentvesting: The property trend you need to know about
Rentvesting: The property trend you need to know about The concept is simple: Live where you love, invest where you can afford. Makes sense, right? That's the crux of rentvesting – buying investment properties in affordable areas while renting homes in suburbs where you want to live. South Africa's buy-to-let market has continued its upward trajectory since its resurgence in 2022. ooba Home Loans reported that 32% of all buy-to-let applications in Q1 '25 derived from the country's most expensive province, the Western Cape. This strategy, adopted by Gen Zs and early millennials, is particularly effective as renting remains cheaper than buying – especially when factoring in the costs of levies and municipal fees. Take a look: An average one-bedroom property on Cape Town's sought-after Atlantic Seaboard would cost a homeowner upwards of R2 million, which comes to R20,644 per month (over 20 years, no deposit at 11%). The average rental for a one-bedroom property starts from R12,000. That's a no-brainer, right? If you're looking at adopting a rentvesting strategy, start with these four practical tips from Only Realty Group: Do the math: Make sure that the property you are purchasing makes financial sense to rent out, and vice versa. Do not overinvest in a rental: While it makes sense to invest money (within reason) into upgrading a property you own, money spent on a rental is essentially a gift to your landlord. Understand the full implications of homeownership: Have a little savings account in case you go without a tenant for a couple of months so that you can cover the monthly costs, such as levies, municipal fees and bond repayments, in times of emergency. Remain objective: Do your homework before you buy that investment property and make sure to opt for an area that is in high demand and offers good returns. Do some research on what properties are selling for in various areas and what they are rented out for. For more on lifestyle, visit Get It Magazine.
The Citizen
21-04-2025
- Business
- The Citizen
Practical financial tips to fast-track the journey to homeownership
The recent Budget Speech underscored the ongoing challenges facing the country, many of which will impact consumers. However, Gavin Lomberg, CEO of ooba Home Loans, emphasises that a favourable interest rate environment helps ease financial pressure, making homeownership more accessible for aspiring buyers. Adding to this, Lomberg notes that while saving for a deposit is always the obvious answer, there are various other avenues that homebuyers can leverage to generate further savings in the long-term. 'If planned carefully and correctly, the journey to homeownership can be a rewarding one,' he says. 'By taking calculated steps under the guidance of trusted professionals, would-be homeowners can save tens of thousands on their home loan, making homeownership an affordable and attainable goal.' Pointing to the prevailing trend of building generational wealth, Lomberg adds, 'Homeownership goes beyond simply owning 'four walls' and a place to live. Today, aspiring homebuyers are leveraging property ownership as a wealth creation strategy for their families and future generations.' Five Extra Ways to Save Purchase properties under the new transfer duty limit Effective 1 April 2025, and subject to approval by Parliament of SA's 2025 Budget, the threshold for exemption from paying transfer duty has been raised by 10% from R1.1m to R1.21m, with all subsequent tiers raised by 10%. 'This adjustment is particularly beneficial for first-time homebuyers where the average purchase price currently sits at just slightly over the R1.21m mark,' says Lomberg, adding that it reduces the upfront costs associated with buying a home and will enable more South Africans to realise their dream of homeownership. Transfer duties are taxes paid to SARS, starting at 3% of the purchase price, depending on the price bracket. However, Lomberg emphasises that buyers are still responsible for conveyancing fees, bond registration fees and Deeds Office fees. Use a home loan comparison service to secure a better interest rate 'Rather than simply approaching your bank for a home loan, it's strongly advised to shop around for comparative quotes,' says Lomberg. 'A home loan comparison service like ooba Home Loans will negotiate with multiple banks on your behalf, ensuring that they compete for your business. In a competitive lending environment, this can translate into significant monthly savings.' As an example, Lomberg notes that ooba Home Loans' average interest rate for customers is currently prime minus 0.55%. 'If you were to accept a home loan of R 1m at the current prime lending rate of 11%, you would pay R10,332 per month, versus R9,950 with an interest rate of prime minus 0.55%. Additionally, homebuyers can choose to pay the higher amount each month to pay off their home loan sooner.' Access the First Home Finance government grant The First Home Finance grant is a subsidy for first-time homebuyers earning between R3,500 and R22,000 per month. 'This government subsidy can either be paid towards a home loan or can be allocated towards a deposit,' explains Lomberg. To qualify, applicants must be: South African citizens living in South Africa. Not have received this housing subsidy before. Be married, cohabiting, or single with financial dependents. Be over the age of 18. Not have previously owned a residential property. The subsidy amount ranges between R30,001 and R130,505, depending on income and affordability. Take advantage of attractive bank discounts and incentives In a competitive lending environment, South Africa's major banks continue to attract buyers with special offers, competitive interest rates and other discounts. 'Each bank's offering differs, but homebuyers can benefit from incentives such as discounts on bond registration costs and an additional discount in their home loan interest rate when moving their primary banking account to the approving bank,' says Lomberg. Buy-to-let as a path to property investment For those looking to enter the property market, a buy-to-let strategy can be an effective way to start building generational wealth. 'Rather than living in their newly purchased home, the homebuyer rents it out while continuing to rent elsewhere or live with family or friends.' Known as 'rentvesting', this strategy allows buyers to generate rental income to help cover their home loan and related costs. 'Over time, homeowners may choose to expand their property portfolio or move into the home once they have greater financial flexibility.' By leveraging these financial strategies, whether through lower interest rates, government subsidies or strategic investment choices, homebuyers can make the path to homeownership more affordable and achievable. 'With careful planning and the right financial tools, securing a home in 2025 may well be more attainable than you first thought.' Issued by: Kristly Bartlett
