Rhys Dyer
ooba Group
CEO
The Quarter 3 2025 (Q3 ‘25) home loan statistics released by the country’s foremost home loan comparison service, ooba Home Loans, reflect a growing sense of optimism within the local housing market.
“South Africa’s housing market is gradually responding to the current rate–cutting cycle. With the prime lending rate now at 10.5% – a full percentage point lower than in Q3 ’24 – home buying affordability challenges are easing, helped along by subdued inflation and lower fuel prices,” comments Rhys Dyer, CEO of the ooba Group.
The latest lending data released by ooba Home Loans shows that South Africa’s banks continue to play a pivotal role in homeownership accessibility through innovative home loan solutions. “The banks’ unfaltering confidence in the property market is evident in their ongoing competitive lending behaviour,” says Dyer.
Application volumes gain ground while loan values rise
Home loan applications in Q3 ’25 were up 4% on Q3 ’24 and up 7% on Q2’25, reflecting steady growth.
Dyer notes that this subdued growth is largely due to the effects of a challenging economic climate, marked by still high unemployment and broader global uncertainty.
“Although application volumes have not surged in response to the lower rates, the total value of home loan applications received in Q3 ’25 has grown by 10% year-on-year, and 6% quarter-on-quarter, reflecting the impact of higher bond values driven by customers purchasing higher-priced properties.”
Source: ooba Home Loans
Bank Approval Rates Edge Up
The latest oobarometer statistics reveal an uptick in successful home loan applications from the previous quarter. The average ooba Home Loans approval rate has increased by 1.1% from Q2 ’25, to 83.9% in Q3 ’25. Buyers who completed the pre-qualification process before applying continued to hold a clear advantage, achieving a 91.0% approval rate in Q3 ’25.
“We also continue to see a healthy ratio of applications declined by one bank but approved by another – at a high of 48.6% in Q3 ’25 – underscoring the importance of shopping around for a home loan,” says Dyer.
Source: ooba Home Loans
Banks Compete for Borrowers
“The banks remain highly competitive in their interest rate discounting as they vie for home loan business,” Dyer adds, pointing to ooba Home Loan’s average interest rate of prime minus 0.69% secured for its homebuyers in Q3 ’25 – a notable year-on-year improvement of 0.14 percentage points.
With banks’ competitiveness in acquiring new borrowers, home loan approvals are granted at
increasingly attractive terms and conditions – zero deposit and cost-inclusive home loans are on the rise. 56% of home loan quotations accepted by borrowers in Q3 ’25 fell into the 100% and greater loan-to-value band, 5% up on the ratio recorded in Q3 ’24.
House Prices Outpace Consumer Inflation
While purchasing a home remains a significant financial commitment, homeowners can take comfort in knowing they are realising strong value from their investments. “Earlier this year, economists reported that, for the first time since the pandemic, South African house prices have begun to outpace consumer inflation once more – a positive development indicating that homeowners’ wealth is rising in line with property values,” comments Dyer.
The effect of rising house prices is evident within ooba Home Loan’s own application data, which reveals the average purchase price for Q3 ’25 was R1 674 442 – representing a 4.4% year-on-year increase – and an even higher uptick (up 4.8% from Q3 ’24) in average approved bond sizes.
This positive trend isn’t driven solely by skyrocketing Cape Town property prices. ooba Home Loans data for the first nine months of 2025 show that all regions except Gauteng South & East have recorded price growth exceeding the consumer inflation rates. “Unsurprisingly, it is the Free State – still retaining the title of the most affordable housing market in the country – that has registered the most growth given its relatively low starting point – with house price inflation in the region up 8.6% year to date,” Dyer adds.
Source: ooba Home Loans
Market Resilience Evident as First-Time Buyers Return
First-time buyers are gradually returning to the market, making up 46.8% of all applications received to date in 2025, up from 45.8% in 2024, according to ooba Home Loans data.
More generous lending by banks to first-time buyers is making homeownership more accessible to this segment. For instance, the average first-time buyer deposit size of 8.9% of the purchase price for Q3 ’25 represents a -13.6% year-on-year decline.
These buyers are also spending more, with the average purchase price in Q3 ’25 at R1 229 267, up 4.1% year-on-year. However, the growth in house prices had a significant impact on the regional volume of first-time buyer applications.
However, the growth in house prices had a significant impact on regional first-time buyer application volumes.
Source: ooba Home Loans
“This is most evident in the Western Cape, where first-time buyers accounted for only 36.4% of all applications — the lowest share nationally — as the province continues to record the highest average purchase price for this segment,” says Dyer. “In contrast, the Free State remains the most accessible market, with first-time buyers comprising 59.6% of all applications. The Free State and Gauteng South & East are the only regions where the average purchase price for first-time buyers year-to-date remains below R1 million.”
The outlook for South Africa’s property market is increasingly upbeat heading into 2026. A firmer rand and softer oil prices are paving the way for further petrol price cuts, easing household cost pressures and helping to contain inflation. With further US rate cuts expected, South Africa’s own interest rate easing cycle looks set to continue. Financial strain on households is gradually easing, and early indicators suggest a modest improvement in economic growth next year, both of which contribute to a more supportive environment for housing demand and affordability.
“South Africa’s property market is proving its resilience,” Dyer concludes. “With interest rates easing, strong bank confidence, and buyers returning to the market, we’re seeing a foundation for sustained growth.”
