With affordability improving, 2026 is shaping up to be a pivotal year for aspirant homebuyers. Lower deposit requirements – especially for first-time buyers – combined with easing financial pressure and more favourable lending conditions are tipping the balance in favour of buyers who have been waiting on the sidelines. “As the cost of accessing the housing market becomes more manageable, many households are asking whether 2026 could finally be the right time to buy,” says Bradd Bendall, BetterBond‘s National Head of Sales.
“As reported in BetterBond’s latest (January) Property Brief, several key indicators point to a property market in recovery, suggesting the answer is an unequivocal ‘yes’. The prime lending rate has dropped a cumulative 150 basis points since the end of 2023, which means that homeowners are paying considerably less each month on their bond.” For example, the monthly repayment on a R2 million home over 20 years at the current prime lending rate of 10.25% is R19 633 – a saving of about R2 000 a month compared to 2023, when prime was 11.75%. Over the full loan term, this adds up to almost R490 000 in interest savings.
Encouraging economic outlook
BetterBond’s latest January Property Brief points to a positive economic outlook for 2026. The rand has been a shining star over the past 12 months, regularly outperforming major currencies around the world. The rand’s 3.2% month-on-month gain against the US dollar in December took the year-on-year strengthening of this currency to 13.8%. “A robust rand and cheaper imports are helping to keep inflation in check, paving the way for possible interest rate cuts as soon as the end of January when the Monetary Policy Committee holds its first meeting for 2026,” notes Bendall.
Furthermore, South Africa’s gross domestic product (GDP) is projected to grow between 1.5% and 2%, a significant improvement on the near-zero growth of recent years. Mining remains a key economic driver, accounting for 44% of the country’s total exports last year. Bendall said stronger global growth should boost prices for key export commodities, which will help contribute to meaningful job creation.
In 2025, rooftop photovoltaic (PV) installations finally exceeded the total installed capacity of utility-scale solar farms contracted to supply Eskom. The country now has more than 11.6 GW of operational solar power. “Rooftop solar reduces grid reliance, boosting yields for property investors. Sustainability features help future-proof investment properties, especially in high-growth areas like the Western Cape,” says Bendall.
Surge in bond applications
Homebuyers are showing renewed interest. By the third quarter of 2025, BetterBond’s bond applications were up 14.6% year-on-year – the highest levels in three years – and 26% above the lows of 2023.
Source: BetterBond Property Brief (January 2026)
“As expected, bond activity dipped during December, traditionally a quiet period for the residential property market. But BetterBond’s December Property Brief shows applications still rose 8.9% year-on-year.” Interestingly, applications for homes over R3 million have increased by a significant 44%. Further rate cuts could trigger an even bigger surge in 2026, says Bendall.
House price growth
House prices continued their upward momentum, notwithstanding the loss of working days during December. Inflation increased year-on-year by 3.3%. House price increases for first-time buyers were marginally lower, at 2.2%. However in nominal terms, these buyers are paying more for their homes – as prices hit a record high of just over R1.3 million. “Hopefully, further rate cuts this year will mitigate the lasting effects of the restrictive monetary policy that characterised the period between 2022 to 2024,” says Bendall.
The Western Cape, Mpumalanga, KwaZulu-Natal and Greater Pretoria were the only regions to outperform inflation, with the Western Cape maintaining the highest average house price at R2.1 million. House prices in this province increased by 7.3%, compared with the national average of 1.7%. Underscoring the demand for property in the Western Cape, average house prices are 40% higher than the national average of R1.6 million and almost double the values seen in North West and the Free State and Northern Cape region.
According to BetterBond’s data, Mpumalanga is not too far behind, recording an average house price growth of 7% in 2025. Only Johannesburg’s North-Western suburbs recorded a decline in average nominal house price growth, most likely because of concerns about poor service delivery standards in the region, explains Bendall.
Less deposit, more home
Affordability for first-time buyers has improved in recent months. The average deposit required by first-time buyers dropped 15% year-on-year and 5.6% quarter-on-quarter. “This points to easing lending conditions and improved affordability,” says Bendall.
Source: BetterBond Property Brief (January 2026)
The gap between deposit requirements for first-time and repeat buyers narrowed significantly towards the end of 2025. “Expressed as the percentage of deposits for all buyers, the average first-time buyer deposit declined by 10% quarter-on-quarter to reach its lowest level since the third quarter of 2022.”
Although first-time buyers still face deposits that are on average 30% higher than in 2021, banks are easing their lending requirements, allowing more new buyers to enter the market.
House prices on the rise
BetterBond’s data shows a 3.3% overall year-on-year increase in house prices in the last quarter of 2025. Prices for first-time buyers reached a record high of just over R1.3 million. “This is a clear sign of improved affordability,” notes Bendall.
Most regions reported strong growth, with only Johannesburg’s North-Western suburbs recording a decline in average nominal house price growth last year.
Practical advice for potential buyers
For prospective buyers, now is the time to review budgets and assess affordability. Applying for bond pre-approval provides a clearer picture of how much they can afford to spend each month. “This will guide decisions about property type, region and price range,” explains Bendall. “While economic conditions are improving, buyers should remain mindful of potential interest rate shifts and the limited availability of homes in high-demand areas.”
He adds that if the rate-cutting cycle continues throughout 2026, it will help ease the impact of the restrictive monetary policy that hindered market conditions from 2022 to 2024. “This could open the door for more buyers to enter the market and invest in property.”