Home ownership is often spoken about as a single milestone we pass as we navigate life. You’ve either bought a home, or you haven’t yet. But actually, nothing could be further from the truth. Owning property is not a one-and-done event, it’s a journey that unfolds and changes as our circumstances, families, careers and priorities change.
And at Chas Everitt, we not only understand this journey, but are committed to being the knowledgeable, trusted guides our clients turn to as they pass through every stage of it. Our role is to help them understand their options, make informed decisions and feel confident they are choosing the right paths as their needs evolve.
We also appreciate the importance of home ownership for personal wealth creation, financial resilience and broader social stability. So while we’re encouraged to see that first-time buyers now once again account for between 45% and 50% of all home loan applications, we’re concerned that the average age of those prospective buyers is 37.
Ideally, we think, that should come down by at least 10 years, not least because it would give buyers a much better chance of paying off their homes and living bond-free by the time they retire.
But there is a big obstacles to this happening, which is the growing tendency among first-time buyers to wait until they can afford a “forever home”, instead of working their way up the property ladder as their parents and grandparents often did, from a flat to a small house and then a bigger house and so on. This is a shame as they are continuing to pay rent for many years in which they could be building up equity and great credit records.
Property ownership, even in a modest apartment or starter home, creates momentum. It gives buyers options. It allows them to trade up as their incomes grow, their families expand or their needs change, rather than trying to take one big leap much later in life. So while interest rates are expected to come down further this year, our urgent advice to first-time buyers is not to wait for that to happen and not to ignore other important factors that are currently in their favour.
The market is currently well balanced, which means buyers have a good selection of properties to choose from and more negotiating power than they are likely to have once prices start rising again. Lower prices also improve their chances of qualifying for a home loan. In addition, banks have substantially lowered deposit requirements for first-time buyers over the past year, making entry into the market more achievable than many people realise.
With the exception of Cape Town and some Western Cape towns, first-time buyers in SA can generally still find many well-located apartments and homes, close to workplaces, schools, shops, public transport and medical facilities, at prices that are easily affordable for young working households.
For example, a household earning around R25 000 per month can typically afford a home costing up to R750 000, and there are literally thousands of good properties available for even less than that. What is more, the bond repayment on a bond of R750 000 is just under R7500 a month, while the current national average rental is around R9200 a month, so it makes even more sense for young people to buy now and get a head start on the home ownership journey.
