Crucial first-time buyer activity picks up

According to the latest FNB Residential Property Barometer, first-time buyers currently account for 25% of all home sales, compared to 20% a year ago, and for almost 40% of sales in the affordable sector. 

This follows three interest rate reductions since November 2024 which, together with a 9,7% increase in the average salary*, have made it progressively easier for prospective homebuyers to qualify for a home loan and afford the monthly repayments.

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In addition, the banks have been slowly lowering their deposit requirements over the past six months, in response to the improved financial position of many would-be borrowers and brighter prospects for the economy as a whole. This also makes it easier for first-time buyers to get into the market and anecdotally, we understand that the introduction of the "two pot" retirement system in late 2024 has also helped many buyers to access the funds needed for a deposit.    

In February, mortgage originator BetterBond also reported a rising percentage of first-time buyers and a 9,6% increase in the number of home loans approved for first-time buyers during 2024.

This is vital for the overall health of the property market because first-time buyers represent the base of the housing ladder, enabling existing homeowners to sell their properties and move up, and keeping the market fluid.  A healthy influx of first-time buyers also helps to ensure a good balance between supply and demand, and a steady increase in home prices.

* The BankservAfrica Take-home Pay Index grew by 9,7% average in real terms in the three months to January 2025.