Reminiscing on the purchase of his first property at the age of 32, CapeTalk’s John Maythamrevealed to listeners how he had paid just R145,000 for the home in Johannesburg.
In today’s money, that’s about R1.25 million, and he certainly got bang for his buck.
“I got a very large, beautiful old home with prestial ceilings and Oregon pine floors, on a 500 square meter plot. What would I get for R1.3 million today? Nothing like that. That’s for sure.”Â
But by today’s standards, Maytham’s purchase while in his early 30s would buck the current trend of homebuying seen among young South Africans.
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According to new research from Lightstone, South Africans under the age of 35 are making up a smaller share of homebuyers than they did two decades ago, with affordability remaining the biggest barrier to entering the property market.
Lightstone business development executive Esteani Marx told Maytham younger buyers were not abandoning home ownership altogether, but were buying later in life because they could not afford to do so sooner.
“Affordability at the moment is definitely one of the dominant drivers. They’re not entering the property market when they would like to do so… they’re entering the market when they’re able to do so.”
Lightstone’s latest research found that people under 35 make up 37% of South Africa’s population but own just 7% of residential property.
Marx said while younger people can afford the monthly bond payments, it’s the upfront costs that are preventing many from getting on the property ladder.
“It’s not only the deposit that you need to put down, but there are transfer fees, registration fees and a lot of costs that come with purchasing a property.”
Maytham noted that younger buyers also faced a tougher market than previous generations, with property prices having risen sharply in many parts of the country, particularly in Cape Town.
And, according to the data, lifestyle choices are also playing a role.
Marx said many young professionals prefer the flexibility of renting for longer rather than tying themselves to a single location early in their careers.
“People today want to be free. They want to get up and go where they need to from a career perspective. The notion of renting rather than purchasing when you’re young seems to be what the younger generation is leaning towards.”
What’s more, the data show that it’s taking the under 35s longer to fly the nest.
Marx noted the growing trend of multi-generational living, with young adults remaining in the family home for longer while saving towards buying their first property.
“We see more and more families staying together for much longer… people supporting each other in a family environment for a little bit longer. Twenty years ago, when I entered the market, your first paycheck directly went towards the purchase of your first property, and that doesn’t seem to be what the younger generation today is aiming for.”
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