The Eastern Cape has registered a market-leading position in home loan approvals, overtaking the Western Cape, according to the latest data from BetterBond.
A home loan applications index of BetterBond, one of SA’s largest bond originators, shows mortgage approval rates have improved across all regions, reflecting renewed buyer interest nationwide.
The average loan application approval ratio for all regions improved for the 12 months to end-April, standing at 77.5%, a modest increase from 74.1% four years ago.
“In several regions, the increases have been more pronounced, with the Eastern Cape overtaking the Western Cape to assume the number one position with a ratio of 83.9%. Greater Pretoria has retained its number two position.
"The Eastern Cape has also recorded the highest gain since 2021, namely 10.2%,” BetterBond’s property brief reads.
The report adds that another interest rate cut is likely to further boost growth in home loan approvals, as improved affordability encourages more buyers to enter the market.
Banks are also taking a more home loan-friendly approach, with Ooba Home Loans reporting strong competition among lenders despite tough economic conditions. Approval rates, loan-to-value (LTV) ratios and interest rates remain favourable.
According to the report, residential building activity remained sluggish in the first two months of the year, except in regions home to SA’s three largest metros — Gauteng, KwaZulu-Natal and the Western Cape, where semigration is high.
“Over the past two years, the ‘semigration’ phenomenon in the latter province has picked up considerable pace, with the Western Cape starting to open a substantial gap for indicators related to the residential property sector, especially for the values of building plans passed and buildings completed,” the report said.
Nationally, the value of residential buildings completed in January and February dropped by 9.3% year on year, with the Eastern Cape seeing particularly slow activity.
Gauteng’s 30% decline was a major setback, while the Western Cape saw a strong surge, increasing nearly 24%.
While every region in SA saw average first-time buyer house prices surpass R1m, the Western Cape led at R1.72m. KwaZulu-Natal was the only region to record negative price growth, while the Eastern Cape, the Western Cape, the North West and Mpumalanga experienced double-digit increases.
FNB’s latest residential barometer, based on Deeds Office data, shows that transaction volumes are still around 16% below pre-pandemic levels (Q4 of 2019), indicating a slow and ongoing recovery in market activity.
The bank forecasts that house price growth will approach the 3% mark by 2026.
“The latest FNB house price index shows a continued, though modest, increase in home values, rising by 2.2% year on year in April, up from 2% in March.
"This marks the fastest pace of growth in nearly two years, since March 2023,” the bank said.
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