Although the Western Cape is still responsible for a large percentage of home loan applications, ooba Home Loans statistics show that inland provinces like the Free State, Mpumalanga, and Limpopo are slowly but surely catching up.
They are also a more popular choice for first-time buyers, says ooba chief executive Rhys Dyer.
“These provinces lead the way in the first-time home buyers’ segment. This is mainly because properties here are more affordable and offer excellent value for money. Their popularity also ties in with the trend of young home buyers moving back to their hometowns to start their own families – and be close to their extended families.”
During the first quarter of 2023, the Free State led the way for first-time home buyer applications, with 71.4% of the total applications received by ooba Home Loans in this province. Mpumalanga followed with 59.4% of first-time buyer applications.
Demand
In general, first-time buyers are more sensitive to interest rate increases than most of the other home buyer categories. Although affordability levels continue to dwindle among these rates-sensitive buyers following the series of repo rate increases since November 2021, Dyer reports healthy levels of activity in this market sector in the Free State.
“In March 2023 alone, 67% of the total home loan applications received for the region were from first-time home buyers,” he says.
“The region’s capital Bloemfontein has enjoyed a marked increase in total sales over the past few years. Notably, the city registered its highest peaks over the past decade in 2021 at 3 492 units and in 2022, there were 3 295 units sold. According to Lightstone, freehold and sectional title units are included in these figures.”
So far this year, Lightstone reports that 522 sectional title units and 282 freehold homes have been sold in Bloemfontein.
“From April 2022 to March 2023, nearly one-third of all home buyers in Bloemfontein are classed as young adults,18 to 35 years old. We believe the high percentage of applications for sectional title properties is because of the age of the applicants,” says Dyer.
Sectional title living holds many attractions – particularly for younger buyers. These include:
- Less maintenance because the upkeep of buildings and amenities is generally the responsibility of the body corporate.
- Communal living.
- Shared amenities such as swimming pools, play areas and clubhouses.
- Lock up and go lifestyle.
Dyer believes that buying property in provinces like Free State, Mpumalanga, and Limpopo is a solid investment strategy – particularly for first-time home buyers who want to enter the housing market.
“All three provinces offer value for money and appeal to home buyers and tenants in search of attractive lifestyle options,” says Dyer.
Attractions
Free State has a lot to offer home buyers, including varied employment opportunities.
Bloemfontein is South Africa’s judicial capital, and Free State University is one of the country’s top learning centres. The province has a strong agricultural industry, with more than 30 000 farms that produce over 70% of the country's grain. It is also South Africa's leader in producing biofuels, with a number of ethanol plants under construction in the grain-producing western region.
Mining is still the province’s largest employer, with twelve gold mines producing around 30% of South Africa’s total output. However, the Free State economy has moved from dependence on the primary sectors of mining and agriculture to an economy increasingly oriented towards manufacturing and export. Around 14% of the province's manufacturing is in high-technology industries – the highest percentage of all provincial economies. The northern Free State's chemicals sector is one of the most important in the southern hemisphere. Petrochemicals company, Sasol, based in Sasolburg, is a world leader in the production of fuels, waxes, chemicals and low-cost feedstock from coal.
The Golden Gate Highlands National Park in the foothills of the Maluti mountains in the north-eastern part of the province is a prime tourist attraction. The sandstone of this region has been used for the attractive dressed-stone buildings found on the Eastern Highlands, and some of South Africa's most valued San rock art is located in the scenic regions around Clarens, Bethlehem, Ficksburg, Ladybrand and Wepener.
With all these attractions, it’s easy to see why the Free State should be increasingly popular among home buyers.
Writer: Sarah-Jane Meyer