Property Brief - April 2023

In this, the second edition of the BetterBond Property Brief we see that the number of applications for new home loans staged a marginal recovery in Q1 2023, but were 21% lower year on year. The number of new home loan applications has dropped nearly 6% since Q1 2020 (before the Covid-19 pandemic). This is the effect of the Reserve Bank Monetary Policy Committee raising interest rates consistently since November 2021, with resultant pressure on the economy, in general, and the property sector, in particular.

The majority of all home loan applications still come from first-time buyers and this has remained stable over the past two years. However, home loan applications from first-time buyers have been on a downward trajectory, with their proportion of all applications going from 71% in Q1 2020 to below 64% in Q1 2023.

For first-time buyers there have been year-on- year declines in average home prices of almost 1% in nominal terms and 7% in real terms. Like many residential property trends over the past 18 months, this too was impacted by higher interest rates.

In nominal terms, all BetterBond regions across South Africa recorded positive growth in average home prices for the 12 months ending March 2023. When adjusting for inflation, however, only the Western Cape figures remain positive. During the preceding 12 months (ending March 2022), Greater Pretoria significantly outperformed the rest of the country, with an increase of 13% in average home prices, followed by the Eastern Cape (8%) and Mpumalanga (7%).

‘Age before beauty’ when it comes to homebuying:

You can read all the editions of Property Brief here.