Reading Time: 2 minutes

The Property Market

When interest rates are high there can be a downturn in people buying properties.

With interest rates being so high at the moment you may wonder:

Are people getting finance to buy homes?

And are those who want to sell able to find buyers?

Well, despite property prices not going up much, there are some good signs for South Africa’s property market.

Recent Stats

In the last quarter of 2023, the average national property price stood at about R1.4 million.

Which is a slight drop compared to the previous few months. But the size of home loans approved actually went up a little bit.

Interestingly first-time homebuyers seem to be saving more money before buying a house. The CEO of ooba Group, Rhys Dyer, said that more first-time buyers are busy saving up for bigger deposits. This is important because it might mean more people will buy houses once interest rates go down in the future (maybe later this year or early next year). Also, recent stats show that there are more properties being bought to rent out, and overall the banks are offering better deals on home loans.

The average interest rate offered by banks is now at -0.48% below prime, indicating a favourable lending environment for potential homebuyers. This suggests confidence from bank’s side and a willingness to compete for home loan market share, potentially benefiting buyers with lower borrowing costs.

Pretty Good Considering High Rates

That doesn’t mean everyone applying for a bond is getting one though.

In fact, those numbers are down but the overall market is sort of holding steady.

‘many people still want to buy property despite the current high rates’

And the stats (applications to the banks for credit) show that many people still want to buy property despite the current high rates. And if you can realistically afford it when rates are high it will be more affordable when rates drop in the future.

Those who bought property during the lockdown are currently facing a massive crisis because of how rates shot up afterwards and many have had to sell or turn to debt review to provide relief.

Those who have not entered debt review and are struggling though are paying thousands extra every month more than they originally planned. They too are desperate to see interest rates start to come down or may be forced to sell or face the bank coming after their property.