By Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole & Ame Muller
First-time buyers are often regarded as the lifeblood of the residential property market. As new entrants to the housing ladder, they support transaction activity, stimulate market liquidity and create opportunities for existing homeowners to upgrade. However, recent data suggests that first-time buyers have been disproportionately affected by the increasingly challenging economic environment, resulting in a notable decline in their market participation during 2026, reflecting the combined effects of elevated borrowing costs, rising living expenses, heightened uncertainty and weakening affordability. In this piece, we examine internal mortgage application data to assess how first-time buyer activity has evolved relative to the broader market.
The most striking development has been the swift reversal in first-time buyer market share in recent months. During much of 2025, first-time buyers steadily expanded their presence in the market, with their share of mortgage applications generally exceeding levels recorded a year earlier. By contrast, 2026 has seen a sustained retreat. Since February, first-time buyers have consistently accounted for a smaller share of activity, with the July share receding by as much as 2.2-percentage points (ppts) compared to the same period in 2025 (Figure 1). This reversal suggests that deteriorating operating conditions have weighed more heavily on aspiring homeowners than on repeat buyers.
The activity data reinforces this conclusion. Both total mortgage applications and first-time buyer applications strengthened in the opening months of the year, reaching a peak in February and March. However, market conditions deteriorated thereafter as heightened global uncertainty, rising living costs and persistent borrowing cost pressures weakened sentiment. While activity levels recovered modestly from April onwards, the rebound has been noticeably stronger for the broader market than for first-time buyers (Figure 2). In other words, housing demand has stabilised, but first-time buyers have not participated fully in the recovery.
This divergence is unsurprising given the financial realities facing many prospective homeowners. First-time buyers typically have less accumulated wealth, lower savings buffers and no existing housing equity to draw upon. Higher borrowing costs not only increase monthly repayments but also reduce the maximum loan size for which households qualify, effectively placing homeownership beyond the reach of some prospective buyers. As a result, first-time buyers tend to be more sensitive to changes in financing conditions and affordability than existing homeowners. These pressures are compounded by supply-side constraints. Residential development activity remains subdued, limiting the availability of affordable entry-level housing. In an environment characterised by tight supply and stretched affordability, first-time buyers are often the first segment to be excluded from the market.
Looking ahead, first-time buyer participation is likely to remain under pressure in the near term. While an eventual resumption of the interest rate cutting cycle should provide much needed relief, a sustained recovery will likely require a broader improvement in affordability conditions, including stronger income growth, improved confidence and an adequate supply of appropriately priced housing. Until then, first-time buyers are likely to remain the segment most exposed to the current housing market headwinds.
Week in review
The leading business cycle indicator declined by 1.4% month-on-month (m/m) to 116.5 in June, while annual growth slowed to 2.1% from 4.2% previously. The monthly decline reflected decreases in five of the seven available components. The largest negative contributors were a decline in South Africa's US dollar-denominated export commodity price index and a slowdown in the six-month smoothed growth rate of the real M1 money supply. In contrast, the main positive contributors were an increase in the number of residential building plans approved and an acceleration in the six-month smoothed growth rate of job advertisements.
Producer inflation slowed to 5.7% year-on-year (y/y) in July, down from 7.5% in June. On a monthly basis, producer prices declined by 1.0% following a 0.1% decline previously, largely reflecting a monthly decline in fuel prices. Though moderated, petroleum-related products were the biggest contributors to annual headline producer inflation, while notable increases also emerged in food products, beverages and tobacco products and metals, machinery, equipment and computing equipment.
Weekly Round-Up: Economics from Broader Africa
Across broader Africa, policymakers continue to balance inflation risks with growth support. Botswana held its policy rate at 5.5% amid elevated inflation and weak growth, while Eswatini benefitted from stronger household credit demand supported by higher incomes. Ghana's outlook remained broadly positive, although renewed cedi weakness and mining-sector uncertainty highlighted lingering vulnerabilities. Mozambique moved to operationalise its Development Bank and may see a major boost if ExxonMobil proceeds with its liquefied natural gas investment. Namibia experienced sharp producer price increases driven by manufacturing and mining costs, while Nigeria's strong external position contrasted with rising food inflation. In Zambia, President Hakainde Hichilema's re-election and upcoming inauguration provide policy continuity and a more stable backdrop for economic reforms and investment.
