The average first-time homebuyer is now older (aged 36) in comparison to a decade ago, with most homebuying activity taking place between the ages of 33-43 (39%), according to ooba Home Loans.
"A decade ago, applicants aged >24 to 33 accounted for a healthy share of applications at 39%. However, by 2024, this figure had dropped by 12% percentage points, highlighting the prevailing challenges of a tough economic climate," Rhys Dyer, CEO, ooba Group said.
The >43-year age bracket has seen the most rapid growth over the past decade.
Over the years, emerging property trends have shaped the way in which first-time homebuyers view, purchase and sell property. Additionally, first-time homebuyers make up nearly half of all of South Africa’s buyers.
Dyer said: "The more favourable market conditions currently support further first-time homebuyer growth."
Property market 2025
January 2025 highlighted a steady intake of first-time homebuyers, accounting for 46% of all applications and climbing month-on-month from a mid-year low of 43%.
Dyer has noted that higher electricity prices and global economic uncertainty may hinder some of the progress being made.
However, the positive does lie in competitive bank lending conditions for first-time homebuyers, underpinned by lowered interest rates.
"For example, we’re already securing an average interest rate of prime minus 0.57% for our customers, translating to significant monthly savings," Dyer said.
"With banks ramping up lending and approvals, now is an ideal time for first-time homebuyers to take advantage of the momentum. Many banks are offering tailored financing solutions, including cost-inclusive loans, to support this valued segment in purchasing their first property."
Here are other first-time buyer trends:
Joint homeownership
Data from ooba Home Loans shows that in 2014, 14% of applicants purchased property with a friend, family member or partner, this number has risen to 18% for 2024.
"This statistic showcases a trend popularly known as houses before spouses in which buyers prioritise homeownership before marriage. It may also be indicative of stretched financial affordability in a tough economic climate, but it remains one of the best ways to spread costs and risk," Dyer said.
Property purchased jointly with a spouse has dipped from 34% in 2014 to 27% in 2024, which indicates the changing nature of homeownership and the life stage that first-time homebuyers are purchasing in.
There has also been a rise in the number of first-time homebuyers without any dependents, 64% in 2024.
Improved financial stability
There has been marked increase in the average purchase price paid by first-time homebuyers in December 2024, followed by a further marginal increase in January 2025, according to ooba Home Loans.
This means that the average first-time homebuyers is at a record high of R1.264 million, a 5.9% increase year-on-year.
There was also a marked increase in deposits paid in January 2025, rising to 10.4%.
More bang for their buck
The strongest first-time homebuyer demand for January 2025 was recorded in Mpumalanga at 68.5% of all bond applications, followed by KwaZulu Natal at 59.1%, Gauteng South & East at 51.6% and the Free State at 51.1%.
First-time homebuyer was responsible for a surge in the average purchase price in Limpopo from R1.23 million in 2024 to R1.61 million in January 2025.
"By comparison, this is only marginally less than the R1.62 million average recorded in the Western Cape: the country’s most expensive housing province," Dyer said.
Freehold for living, sectional title for investment
According to ooba Home Loans, historical data has shown an unwavering preference for freehold homes as the primary residence for first-time homebuyers.
Dyer said: "While some of the features of an aspirational home such as staff quarters, home studies and stand-alone dining rooms have fallen away, first-time homebuyers still have an unwavering preference towards freehold homes in South Africa."
The decrease in freehold homes being purchased by first-time homebuyers from 70% in 2014 to 66% in 2024 may be indicative of an array of factors, including
- more value for money,
- a growing preference towards multi-generational living
- greater demand for starter homes located within townships.
In terms of investing, first-time homebuyers are leaning into the lock-up-and-go lifestyle associated with sectional title homes, accounting for 60% of first-time buy-to-let purchases in 2024.
Dyer said: "By comparison, freehold homes accounted for 52% of investment purchases in 2014."
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