oobarometer Quarter 1 2026: Latest Data Reveals First-Time Homebuyer Comeback as Barriers to Entry Ease

“Both the volume and value of loan applications have recovered from the low point in Q4 ’23, with volumes up 15.9% and application values rising a stronger 30.4% by Q1 ’26,” says Rhys Dyer, CEO of the ooba Group. “This reflects growing demand, particularly in higher price bands.”

SOURCE: ooba Home Loans

While still below the record highs of the pandemic, the value of granted bonds have also rebounded from a sharp dip in 2024, strengthening by 36.6% during this period to reach the highest level seen in over two years. This points to both the ongoing recovery of the home loan market and sustained confidence among lenders and homebuyers alike.

“Rising house prices and ongoing demand in higher-value regions, particularly the Western Cape, continue to support the growth in the value of granted bonds,” Dyer adds

Homeownership Well Within Reach for First-Time Homebuyers

First-time homebuyer activity reached a multi-year high in Q1 ‘26, signalling a continued recovery in this key segment. “First-time homebuyers accounted for 48% of all applications in Q1 ‘26, up from 46.5% a year ago,” says Dyer, noting that this reflects a steady return to the market – particularly in the more affordable areas.

This trend is most pronounced in regions such as the Free State and Gauteng South & East, where the percentage of first-time homebuyer applications reached 63% (up 6.9 percentage points) and 56.6% (up 5.6 percentage points), respectively. Both regions remain among the country’s most accessible housing markets, with average purchase prices of approximately R990,000 and R1 million in Q1 ‘26.

By contrast, first-time homebuyers in the Western Cape accounted for just 38.2% of home loan applications, highlighting the impact of affordability constraints on market participation.

House Price Growth Strengthens, But First-Time Homebuyers Buck Trends

Nationally, ooba Home Loans data for Q1 ‘26 shows that house price growth continues to outpace inflation, with average purchase prices increasing by 4.7% year-on-year – well ahead of annual consumer price inflation (CPI) at 3.2% for 2025. 

However, Dyer notes that this growth is not evenly distributed across homebuyer segments. “While overall purchase prices continue to rise, the average price paid by first-time homebuyers increased by a more modest 1.5% year-on-year, indicating a more cautious approach at the entry level of the market, even as improved interest rate conditions support their return.”

SOURCE: ooba Home Loans

Regional house price inflation underscores the uneven nature of the recovery. “Johannesburg stands out as a clear leader, with prices paid by homebuyers overall rising 17.9% year-on-year, while for first-time homebuyers alone, price growth rose by a more robust 20.3%,” says Dyer. 

He does note that both figures have been amplified by Johannesburg’s unusually low average transaction price in the first quarter of 2025 – a base effect that temporarily bolsters the annual growth rate.

“Nonetheless, this reinforces the city’s role as a key driver of national performance and points to a broader rebound in Gauteng’s property market, supported by increased sales activity.”

Conversely, Tshwane trails all regions, recording the weakest overall house price growth, with prices paid by first-time homebuyers declining year-on-year. Elsewhere, the Eastern Cape and Limpopo posted solid overall growth of 11.1% and 9.9% respectively; however, price growth among first-time homebuyers in these regions was more subdued, rising by just 1.8% in the Eastern Cape and falling by 7.9% in Limpopo.

Improving Lending Conditions Strengthen Homebuyer Access

In a time of rising house prices, shopping around for the most competitive home loan remains a crucial tool in a homebuyer’s arsenal. 

In Q1 ’26, ooba Home Loans reported a strong overall approval rate of 84%, alongside a notable increase in applications declined by one bank but approved by another (up at 45.5%). 

Five of nine regions also saw higher approval rates than in Q4 ‘25, led by the Eastern Cape (3.3 percentage points) with the highest regional approval rate at 87.8%. Approval rates in the Western Cape (86.2%) and KwaZulu-Natal (84.9%) also exceeded the national average.

Interest rate concessions averaged prime less 0.67% in Q1 ‘26 (unchanged quarter-on-quarter and improved by a remarkable 12 basis points year-on-year). Dyer notes: “With banks competitiveness on acquiring new borrowers, home loan approvals are granted at increasingly attractive interest discounts and reduced deposit requirements.”

Elaborating on deposit values, Dyer says: “In Q1 ‘26, the average deposit paid by homebuyers remains at a solid 12.8% of the average purchase price (R221,937). While this is still above the recommended minimum of 10%, it has declined from 15.4% a year earlier. Among first-time homebuyers, deposit sizes average 8.2% (down from 9.6% in Q1 ‘25, now at R103,842). Both trends point to an increased reliance on financing to support home purchases.”

Zero-Deposit and Cost-Inclusive Home Loans Expand Access to the Market

Q1 ’26 data has also highlighted a notable increase in the availability and uptake of both 100% (zero-deposit) and cost-inclusive (>100%) home loans. 

“The share of applications for 100% home loans from repeat homebuyers reached a decade-long high in Q1 ‘26, accounting for 55.8% of all applications. Among first-time homebuyers, demand for this type of financing was even stronger, accounting for 60.2% of all applications received over the quarter,” explains Dyer. “And, with the gap between the two segments narrowing since 2023, it’s clear indicator of both the nationwide demand for this kind of offering, and a growing willingness among the banks to support homebuyers with limited to no upfront capital to fund a deposit.”

SOURCE: ooba Home Loans

As noted, demand for cost-inclusive loans has also grown over the period. “Cost-inclusive home loans remove one of the biggest barriers to entry for first-time homebuyers: costs related to transfer duty and bond registration fees. Applications for these loans from first-time homebuyers have risen sharply, from 0.49% in 2016 to nearly 16% in early 2026. Repeat homebuyers are also benefiting, with their share of cost-inclusive loan applications increasing from just 0.1% to 2.3% over the same period.”

Viewed together, these shifts towards 100% and cost-inclusive home loans point to a more competitive and accessible lending environment, where homebuyers who actively compare offers are increasingly able to enter the market.

Market Headwinds Ahead – But Homebuyers Still Have Options

While the outlook for the local property market remains broadly positive, ongoing conflict in the Middle East is likely to push up fuel prices, adding pressure to inflation and the cost of living. This may delay further interest rate cuts, placing additional strain on home loan affordability – particularly for first-time homebuyers.

“Despite this, housing demand remains resilient, driven by life-stage factors such as relocation, family growth and proximity to work and schools,” says Dyer.

“In this environment, securing a competitive home loan is critical. Comparing offers across lenders can help buyers access better terms and maintain affordability despite economic pressures,” he concludes.