The high cost of living has seen first-time home buyers progressively become older.
Renier Kriek, the MD of Sentinel Home, a nonbank home loan provider, says affordability and the ever-increasing inflation has meant most people delay buying their first homes.
“Asset prices have escalated much faster than wage increases over the past 70 years and that trend is likely to continue. This simply means that homes are becoming less affordable. If the trend of decoupling asset and wage prices is going to continue, the best bet is to get into the property market sooner rather than later. Particularly when there are so many bargains to be had.
“First time home buyers are progressively becoming older because of affordability. It has moved from around 30 to 32 years to around 38 to 40 years. You must get in earlier to buck this trend. If you wait until the time you can afford your dream home, you may never be able to achieve that goal,” said Kriel.
He said currently the market was favourable to the buyer as SA was coming off from a high-inflation-high, interest-rate cycle.
“Inflation has become a more manageable beast, and market watchers are starting to predict a decline in interest rates next year. If you want to time the market, you have to buy now.”
Kriek said first-time buyers who can afford to acquire property at current interest rates will likely be able to afford it through the cycle; and unlikely to buy what they can’t afford.
“The ugly duckling may be a better start than the shiny house on the hill.”
He also suggests that prospective buyers use a bond originator to get pre-qualification for a home loan. The bond originator shows that you are a serious purchaser, which makes everyone so much more willing and able to help.
*Atandwa, a 43-year-old retail shop manager in Joburg, bought his first home last year after having contemplated it for years.
“I always wanted to own my home from when I was in my 20s but life happened but I couldn’t afford one. The costs were just too much, and I have a young family and I didn’t want to fall into the trap of getting debt that would make me suffer financially.
Home ownership becomes elusive for prospective younger buyers
Consumers urged to use bond originator for pre-qualification
Image: 123RF
The high cost of living has seen first-time home buyers progressively become older.
Renier Kriek, the MD of Sentinel Home, a nonbank home loan provider, says affordability and the ever-increasing inflation has meant most people delay buying their first homes.
“Asset prices have escalated much faster than wage increases over the past 70 years and that trend is likely to continue. This simply means that homes are becoming less affordable. If the trend of decoupling asset and wage prices is going to continue, the best bet is to get into the property market sooner rather than later. Particularly when there are so many bargains to be had.
“First time home buyers are progressively becoming older because of affordability. It has moved from around 30 to 32 years to around 38 to 40 years. You must get in earlier to buck this trend. If you wait until the time you can afford your dream home, you may never be able to achieve that goal,” said Kriel.
He said currently the market was favourable to the buyer as SA was coming off from a high-inflation-high, interest-rate cycle.
“Inflation has become a more manageable beast, and market watchers are starting to predict a decline in interest rates next year. If you want to time the market, you have to buy now.”
Kriek said first-time buyers who can afford to acquire property at current interest rates will likely be able to afford it through the cycle; and unlikely to buy what they can’t afford.
“The ugly duckling may be a better start than the shiny house on the hill.”
He also suggests that prospective buyers use a bond originator to get pre-qualification for a home loan. The bond originator shows that you are a serious purchaser, which makes everyone so much more willing and able to help.
*Atandwa, a 43-year-old retail shop manager in Joburg, bought his first home last year after having contemplated it for years.
“I always wanted to own my home from when I was in my 20s but life happened but I couldn’t afford one. The costs were just too much, and I have a young family and I didn’t want to fall into the trap of getting debt that would make me suffer financially.
“After saving some money in 2021, I decided to take the leap. I was already older than your typical first-time owner but that did not bother me,” said Atandwa, who owns a two-bedroomed house in Cosmo City.
“Real estate, whether it is your own home or an investment property, comes with expenses and tax consequences. However, if you do not want to live from wage-to-wage for the rest of your life then some sacrifices are called for to enter the property market,” said Kriel.
“Every goal has some sacrifices and the sacrifices for financial goals are of the living standard kind. If you want to truly benefit from asset ownership, you will have to suffer some short term discomfort. That is reality.”
TIPS FOR FIRST TIME HOME BUYERS
Once a buyer is ready to purchase, Adrian Goslett, the regional director and CEO of RE/MAX of Southern Africa, recommends getting pre-approval on a home loan before they start the house hunting process.
This shows the seller that the buyer is in a serious position to purchase, which can increase the chances of their offer being accepted, especially if there are other offers on the table.
Involving a property professional can also accelerate the process of finding their dream home as estate agents are often privy to homes before they even hit the market.
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