If you are in your 20s, you should be considering buying a property.
“Buying property at a young age is one of the smartest decisions a person can make,” says Richard Gray, chief executive of Harcourts South Africa.
“Not only does it provide a sense of security and stability, but it also allows for long-term financial benefits."
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South Africans should start investing in property “as early as possible”, he says, adding that now is the “perfect time” for millennials to take advantage of the real estate market and secure their future.
Those who are able to invest in property when they are young have the opportunity to build wealth through property appreciation and rental income. Owning a property also provides a valuable asset that can be leveraged for other investments and financial goals.
In addition to financial benefits, Gray also emphasises the personal benefits of owning a property.
"It's not just about the money, it's also about having a place to call your own and creating a home for yourself. Homeownership provides a sense of pride and accomplishment that cannot be replicated."
New data from ooba Home Loans shows that the average age of the first-time buyer for the first quarter of 2023 was 35. And the average purchase price was R1.136 million, an increase of 0.4% from the price during the same period last year.
Chief executive officer Rhys Dyer says: “Q1 ’23 statistics for first-time home buyers also reveal an average deposit of R109 793 (9.7% of the purchase price), marking a whopping 44.8% year-on-year increase and a 10.2% increase from Q4 ‘22.
“We are pleased to see this market segment embracing deposits as a sign of smart financial planning.”
For young adults who are just starting their property search, Gray suggests they consider their lifestyle and financial goals before making a decision.
“It's important to think about what you want in a home and what you can realistically afford. You should also factor in the costs of maintenance, insurance, and property taxes when considering a purchase."
Last year, says Yael Geffen, chief executive of Lew Geffen Sotheby’s International Realty, a “massive” 129 318 homes were sold to first-time buyers who invested R93 306 746 753 in the residential real estate market.
“These numbers are particularly encouraging in South Africa where land ownership is historically significant.”
Female buyers, in particular, are making an impact in the residential property market.
“Women own nearly 60% of South Africa’s residential housing stock, either on their own or as joint title-holders. The percentage of women-only property purchases is also increasing, as is the number of single women entering the real estate market.”
Another trend Geffen notes is the increase in migration.
“Improved quality of life perception is galvanising nation-wide semigration to the Western Cape. Last year relocations to the Western Cape totalled more than semigration to Gauteng and KZN combined. And while Johannesburg may be losing qualified buyer semigrants, the residential market gap is rapidly filling with buyers from other African nations; investors seeking a real estate foothold in the continent’s economic powerhouse.
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