Gauteng tops the list for first-time buyers

Published October 2024

Although Gauteng has the most first-time buyers in the country, the demand for homes in the Western Cape remains high, driving property price inflation in this sought-after province.

“For the past 12 months, Gauteng has remained the most popular province for first-time buyers, accounting for 51% of loans granted by BetterBond to this part of the market,” says Bradd Bendall, BetterBond’s National Head of Sales. Most of this first-time buyer activity has been in Johannesburg’s South-Eastern suburbs, possibly because it offers affordable properties within close proximity to work and economic opportunities. 

According to the RE/MAX National Housing Report for the second quarter of 2024, three of the five top suburbs based on the number of units sold in the past year were in this part of Johannesburg: Heidelberg, Vereeniging and Alberton. BetterBond reports that the average bond value in Johannesburg South East is around the R1.1 million mark. “As transfer duty is only payable on homes of more than R1.1 million, it stands to reason that this housing market would appeal to first-time buyers who may not have the financial means to pay additional tax when buying a home,” says Bendall. 

Property24 lists the average asking price of homes in Heidelberg at just over R1 million. Vereeniging’s average asking price comes in below R1 million at around R930 000 while Alberton’s average asking price is above the R1.1 million threshold at R1.3 million. 

Interestingly, in the past four months, the Western Cape has become the second most popular province for first-time buyers, says Bendall. “This is surprising given that demand for homes in this coastal province makes it one of the most expensive in the country.” BetterBond’s September Property Brief reports that average house prices in the Western Cape have increased by 16.4%. House prices in the Eastern Cape increased by 16.3% and in Johannesburg North West, by 15.2%. 

“The Western Cape is also the top performer when it comes to home loan value,” says Bendall, with the average home loan value in the past 12 months being R1.6 million.” Johannesburg’s North-Western suburbs follow closely, with Pretoria in third place for home loan rates. 

However, Bendall adds that there is value to be found in the Western Cape, with first-time buyers looking at the northern suburbs and Western Seaboard in Cape Town for accessible homes. Young professionals may consider micro-apartments or mixed developments in Cape Town’s central city that offer lock-up-and-go convenience. Smaller towns outside of Cape Town offer larger properties at competitive prices, making them attractive options for first-time buyers with families, adds Bendall. 

“It is encouraging that, as Lightstone reports, first-time buyer numbers have increased marginally from 2023 volumes. As interest rates drop, we expect buyer activity to pick up, especially among first-time buyers. We are already seeing a lowering of deposits required to qualify for home loans, with a year-on-year decline of 10% for first-time buyers,” says Bendall. “This renewed activity will go a long way to reinvigorating the property market as interest rates continue to drop.”