South African house prices rise 5% as first-time buyers retreat, ooba data shows
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South Africa's average purchase price climbed 5% year on year to R1.76 million in the third quarter of 2026, but first-time buyers' share of home loan applications slipped to 46.5% as deposits thinned and borrowing costs rose.
South Africa's residential property market is holding up, with the national average purchase price rising 5% year on year to R1.76 million in the third quarter of 2026, outpacing consumer inflation of 4.4%, according to ooba Home Loans.
The lender's quarterly data shows first-time buyers losing ground. Their average purchase price rose 5.1% year on year to R1.29 million but fell 1.8% from the previous quarter, and their share of home loan applications dropped to 46.5% from 48.1% in the second quarter and 47.8% a year earlier.
Buyers are also contributing less up front. The average deposit fell to 12.3% of the purchase price from 13.4% in the second quarter, and among first-time buyers it slipped from 8.9% to 8.4%, pointing to heavier reliance on mortgage finance. Home loan applications rose 2.1% in volume and 3.2% in value quarter on quarter, while granted loans increased 1.7% and 2.4%, though activity remains below year-earlier levels.
Seven of the nine regions monitored by ooba recorded house price growth above inflation, ranging from a 16.3% increase in Limpopo to a 1.5% decline in the Free State. Lenders are cushioning affordability pressure: average interest rate discounts reached 0.76 percentage points below prime in the quarter and 0.83 points in September. Zero-deposit loans accounted for 56.6% of applications and cost-inclusive loans rose to 9.8% from 8.4%, while the overall approval rate held at 84.3%.
ooba Group chief executive Rhys Dyer said the figures point to a market "recalibrating rather than retreating" despite higher fuel prices and recent rate hikes. Investors accounted for 13.1% of applications, up 1.6 percentage points year on year, and made up 33.7% of applications in the Western Cape.
Dyer expects affordability to remain the key constraint for the rest of 2026, with demand becoming more selective and favouring investors and life-stage movers such as growing families and empty-nesters. Whether the resilience carries into 2027 will depend on borrowing costs, household finances and the rising cost of homeownership, the report said.