Samuel Seeff
Seeff Group
Chairman
The increase in the transfer duty exemption threshold to R1.21 million presents a golden opportunity for first-time homebuyers, according to the Seeff Property Group.
This follows the upward adjustment of the transfer duty tables by 10% in this year’s Budget 2025, which increased the exemption threshold for transfer duty to R1.21 million.
Aside from interest rate savings following the recent rate cuts, this adds further savings for first-time buyers especially, says Samuel Seeff, chairman of the Seeff Group. It has improved affordability, especially given that the average price for first-time homebuyers is around R1.264 million, according to mortgage originators ooba.
Lightstone data shows that first-time buyers tend to purchase in the R700,000 to R1.5 million price range. Almost half of all home loan applications in the last quarter of last year were from first-time homebuyers, with buying levels growing by about 9% during the latter half of last year compared to the first half.
That affordability has been an issue for first-time buyers is also reflected in deeds office data showing that first-time buyers are now older compared to a decade ago. That said, most of the bigger metros have experienced good levels of younger buyers under 35, making up around one-third in many areas.
The highest levels of younger buyers are in the Greater Joburg area, with the East Rand (50%) leading, followed by Johannesburg (29%), Pretoria/Tshwane (29%), and Soweto (27%). The other metros also include good levels, such as Bloemfontein (28%) and Gqeberha (28%), with Durban (26%) and Cape Town (26%) at slightly lower levels.
Also on the upside for first-time buyers is the continued favourable mortgage lending. Ooba, for example, recently noted that first-time buyers accounted for 46% of home loan applications. These buyers are often still able to secure loans of up to 100% of the property’s value, with some banks still offering costs on top of that.
While the most dominant price range for first-time buyers is between R700,000 and R1.5 million, Lightstone data shows that about 80% of all purchases are below R1.2 million, with only about 7.5% over R1.5 million. Johannesburg and Durban metro areas tend to be more affordable for first-time buyers than the Cape Town metro area.
The relatively flat price growth over the last two years means that first-time buyers can still find good value in the market. With the reduced interest rate and no transfer duty below R1.2 million, the market is more favourable for first-time buyers than a year ago.
To speed up the home-buying process, first-time buyers should first do a home loan pre-qualification to ensure their financial readiness and ascertain how much they can buy. They should also gather all the necessary documentation, such as proof of income, bank statements, and identity documents, which will streamline the application process.