Latest news with #oobaHomeLoans'
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
IOL News
25-06-2025
- Business
- IOL News
Your guide to buying property: tips for first-time buyers
Discover the challenges and opportunities for first-time homebuyers in the Western Cape. With insights from industry experts, learn about affordable areas, creative strategies, and the growing appeal of the region for both local and international buyers. Image: Todd Goodman The Western Cape continues to be one of South Africa's most desirable regions for property investment, luring interest from both local and international buyers. Yet for many first-time homebuyers—especially those eyeing Cape Town—the dream of homeownership can feel increasingly out of reach. According to ooba Home Loans' latest oobarometer, the average purchase price in the Western Cape during Q1 2025 stood at a staggering R2.33 million, significantly above the national average of R1.66 million. Nevertheless, activity among entry-level buyers has not waned—proof that creative solutions and alternative strategies are helping many take that important first step onto the property ladder. '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. Despite the province's high price point, Lightstone data shows that 40% of housing stock in the Western Cape is priced under R750,000. However, most of these properties are concentrated 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.' Within Cape Town, many new buyers are opting for micro-apartments and sectional title units in high-density, mixed-use developments. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading 'These offer security and lifestyle perks like on-site retail, communal workspaces, and gyms,' Smee adds. The province's magnetic global appeal hasn't gone unnoticed. While the local market wrestles with affordability, foreign investors are entering at the higher end. 'According to Lightstone data, the province leads in luxury price bands, with international homebuyers accounting for over 40% of purchases above R10 million, around 25% in the R5 to R10 million range and approximately 15% in the R3 to R5 million bracket,' says Smee. '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 R10 million. To purchase an apartment in London, with considerably less living space, homebuyers will pay upwards of R12 million.' This sentiment is echoed internationally. The Australian Property Investor recently reported that South Africans pay around R17,000 per square metre for a median-priced home, compared to R113,000 in Australia. While Cape Town remains a prime property hotspot, buyers are expanding their search. '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,' says Smee. 'These areas provide easier entry points for buyers and remain within comfortable reach of Cape Town.' Beyond the Western Cape, other provinces offer compelling options. '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 continues to draw buyers seeking well-established infrastructure. 'Popular nodes like Waterfall, Bryanston, and Hyde Park are drawing interest from buyers seeking well-established infrastructure and upscale living,' Smee adds. KwaZulu-Natal's North Coast has emerged as an investment beacon. '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.' The Eastern Cape is also gaining ground, with towns like Jeffreys Bay and Kenton-on-Sea growing in popularity among short-term rental investors. 'These regions combine access to economic centres with a 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 'rentvestment' opportunities, whether for short-term letting or longer-term leasing.' Smee advises that while buying in the Western Cape might require more strategy and patience, the long-term rewards make it worthwhile. 'For homebuyers determined to get a foothold in the Western Cape property market, there are many options available. This investment is well worth it too as the average growth of property in the province is around 7.4%.' Top tips include: Enter into a joint home loan : 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. Start on the outskirts : 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. 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. PERSONAL FINANCE
