BetterBond: Why the housing market still has room to run

• Home loan approvals climbed to 64.5%, while applications remain 11.3% above Q4 2023 levels despite softer recent activity.
• Western Cape house prices surged 13.8%, with Greater Pretoria up 11.5% as regional markets continue to diverge sharply.
• Lower deposit requirements, improving affordability and interest-rate indicators are creating a more supportive environment for buyers.

Property market resilience meets improving affordability

‍South Africa’s residential property market is entering the final months of 2026 with a mix of resilience, improving affordability and increasingly divergent regional performance, according to the September 2026 BetterBond Property Brief.

The latest report tracks the indicators that matter most to homebuyers, property investors and the residential industry, from home loan applications and approval rates to house prices, deposits, employment, income and interest rates.

The broader economic backdrop is also becoming more supportive. A stronger rand, continued retail sales growth and a more favourable inflation outlook are helping household finances, while the relationship between long-term bond yields and commercial lending rates suggests there could be further room for monetary-policy easing.

The September edition also marks an important development for BetterBond: Dr Roelof Botha has been appointed economic advisor, expanding a relationship that has already seen him co-author the monthly Property Brief for several years.

September's property numbers

‍The latest data paints a market that is not booming uniformly, but is showing important signs of underlying strength.

• Home loan applications: Applications were virtually unchanged during the first two months of Q3. However, activity remains 11.3% above Q4 2023 levels, showing how far the market has recovered from its previous lows.
• Home loan approvals: The approval ratio improved to 64.5% at the end of August, supported by improving employment conditions and lower interest rates.
• First-time buyers: The average purchase price paid by first-time buyers has reached approximately R1.4 million, representing a nominal increase of 19% since Q3 2023.
• House prices: Average prices nationally have risen 2.5% in real terms over three years, while average deposit requirements are still 7.3% below their level two years ago.
• Affordability: Buyers aged 41–50 now require the equivalent of approximately seven quarters of income to purchase a home at the national average price. That ratio has fallen 27% since 2021.

For investors and buyers, this combination matters. Property prices are rising, but lower deposit requirements and improving income-to-price ratios indicate that some of the affordability pressure built up during the higher-interest-rate cycle is easing.

Western Cape and Pretoria lead price growth

‍The national averages disguise some substantial regional differences. The Western Cape recorded house price growth of 13.8%, making it the standout regional performer in the September report. Greater Pretoria followed at 11.5%.

Mpumalanga, meanwhile, moved into third position in terms of average house prices, reaching approximately R1.67 million. There are also differences across income groups. Buyers earning between R15,000 and R25,000 per month recorded a 6.5% year-on-year increase in average purchase prices, compared with national growth of 5.9%.

These numbers reinforce an important message for investors: there is no longer one South African residential property market. Regional economic performance, employment, migration, affordability and housing supply are increasingly determining where demand and price growth, is concentrated.

Could interest rates move lower?

‍One of the more significant signals in the September Property Brief comes from the interest-rate environment. At the end of August, the spread between South Africa's long-term interest rate and benchmark commercial lending rate stood at negative 210 basis points.

According to the report, that divergence points towards scope for a further reduction in the prime lending rate. For property buyers, even relatively modest rate reductions matter.

Lower borrowing costs improve affordability, increase qualifying capacity and reduce monthly repayments, potentially bringing additional buyers back into the market. The macro environment is providing further support.

Retail trade sales are expected to approach R1.6 trillion during 2026, equivalent to around 20% of GDP, while the rand has strengthened against nine of the world's ten largest economies since the beginning of 2025, including a 17% appreciation against the US dollar.

Jobs reveal another property-market divide

‍Employment data provides another important clue to future housing demand. The Western Cape added approximately 91,000 jobs over the past year, while Gauteng lost a similar number.

At national level, formal-sector employment increased 5.3% year on year to approximately 12 million jobs. Employment matters directly to property. Sustainable housing demand ultimately depends on households having the income and confidence to qualify for and service long-term mortgage debt.

The divergence between provinces therefore deserves close attention alongside house-price growth and semigration trends.

Dr Roelof Botha expands his role at BetterBond

‍The September report coincides with the appointment of Dr Roelof Botha as economic advisor to BetterBond, significantly expanding his existing relationship with the bond originator.

Botha has more than five decades of experience analysing South Africa's economy. His career has included serving as an economic policy advisor in the Department of Finance, heading the economics division of the South African Federated Chamber of Industries and spending 28 years as resident economist at PwC.

His research has covered monetary policy, residential property, macroeconomic forecasting and small-business development, and he has published more than 1,000 articles and research reports.

Under his expanded mandate, Botha will provide regular macroeconomic analysis to BetterBond's management, staff and clients, undertake research relevant to property developers and other participants across the residential value chain, and provide economic commentary to the market.

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“There is no shortage of economic commentary in South Africa. There is a shortage of the kind that holds up six months later,” says Stephan Potgieter, CEO of BetterHome Group Mortgage Origination and BetterBond.

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Botha says his association with BetterBond reflects the wider economic importance of housing. “This is a sector whose expansion is vital for driving economic growth, creating jobs and ensuring socio-political stability.”

Importantly, Botha remains an independent economic researcher while undertaking his expanded role with BetterBond.

What investors should take from the September data

‍The September numbers point to a residential market that is recovering selectively rather than accelerating everywhere at once.

Home loan applications have stabilised, approval ratios are improving, deposits are more manageable than two years ago and affordability measures have strengthened. At the same time, Western Cape and Pretoria price growth demonstrates how quickly demand can concentrate in stronger regional markets.

For investors, the lesson is to look beyond national averages. Employment growth, affordability, lending conditions, migration patterns and regional price momentum increasingly need to be assessed together.

And perhaps the most significant variable to watch over the coming months is the cost of money. If the interest-rate environment becomes more accommodative, improving mortgage affordability could provide another catalyst for residential demand heading into 2027.

DOWNLOAD THE SEPTEMBER 2026 BETTERBOND PROPERTY BRIEF

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