The rise in self-employment among South Africans is reshaping the property landscape, with lenders reporting a surge in home loan applications from entrepreneurs, freelancers, and independent contractors—groups once underrepresented in the market.
Driven by high unemployment, post-pandemic business shifts, BEE regulations, and broader economic uncertainty, this trend reflects a growing preference for financial independence and a move away from traditional salaried work.
According to ooba, self-employed buyers now make up 14% of all home loan applications—up from 9% during the pandemic—accounting for nearly 20% of total loan value, indicating renewed confidence among small business owners.
While banks are beginning to ease lending terms and reduce documentation requirements for consistent earners, self-employed applicants still face stricter vetting, requiring detailed financials, cash flow projections, tax clearance, and business registration documents.
Challenges like outdated accounts, tax issues, and poor separation of business and personal finances can hinder approval, but with expert support from bond originators and agents familiar with the complexities, self-employed buyers are increasingly finding paths to homeownership.
The latest BetterBond Property Brief shows a notable recovery in homebuyer activity, with home loan applications rising by 9.3% year-on-year and 7.7% quarter-on-quarter in Q1 2025.
This marks a clear uptick in market confidence, particularly in Gauteng, which remains the most active province, accounting for 48% of all loans granted over the past year.
The early signs of renewed homebuying activity in January and February gained momentum in March, helping lift the BetterBond Home Loan Index by 7.7% quarter-on-quarter and 9.3% year-on-year in Q1. After a prolonged slowdown triggered by high interest rates, application volumes have stabilized since mid-2023.
Between Q1 2020 and Q1 2022, before rate hikes took effect, the index grew by a substantial 29%, but has since been tempered by tighter monetary policy.
Despite the Monetary Policy Committee’s decision not to cut the repo rate in March, lower inflation—currently at 3.2%—could pave the way for a rate cut in May, potentially boosting market activity further.
While lower bond servicing costs haven’t yet led to robust price growth, first-time buyers saw average prices rise by 3.1% year-on-year in Q1—nearly on par with inflation. Overall market prices increased by a modest 0.5%, slightly reversing the small declines seen earlier in the year.
Viewed over five years, property remains a reliable store of value. Since Q1 2020, average home prices have grown by 5.7% annually for all buyers and 6.1% for first-time buyers—outpacing both inflation and the 2.4% dividend yield on the Satrix index (a JSE benchmark).
After a temporary dip in required deposits in mid-2024, the upward trend has resumed—though modestly. In Q1 2025, the average deposit for first-time buyers rose by 1% quarter-on-quarter to R185,000, but remained 5.1% lower year-on-year.
All buyers saw improvements, with deposits decreasing by 2.2% QoQ and 4.9% YoY. A contributing factor may be the 1.8% drop in bank credit impairments in late 2024, signalling improved borrower risk profiles.
This contrasts with the earlier 5.1% rise in impairments between December 2023 and October 2024.
First-time homebuyer activity rose sharply, with a 33% increase in loans granted over the past 12 months. Johannesburg’s south-eastern suburbs and the Western Cape remain the top two regions for first-time buyer loans.
Gauteng continues to dominate, representing 48% of total home loans issued. Other provinces gaining momentum include Mpumalanga, Free State, Northern Cape, and North West, while activity declined in Greater Pretoria, Eastern Cape, and Johannesburg’s north-western suburbs.
Metropolitan areas continue to drive the bulk of first-time buyer loans, contributing 77% of the national total.
