First-time home buyers’ guide
Best areas, biggest lures21st Jun 2022
Which provinces or towns are popular among first-time home buyers, and what can developers do to mine and appease this lucrative market?
Here experts in the field share their thoughts.
Road to market paved
Slowing property price growth and continued strong competition between banks facilitate new homebuyers’ entry into the property market, according to statistics for the first quarter of 2022 (Q1 22), released on April 25 by top home loan comparison service, ooba.
‘The rising interest rate cycle has some believing it’s not the right time to enter the market. While prime lending rate increases will see a repayments hike, its modest pace suggests that buyers should continue to benefit from a relatively low interest rate environment,’ says ooba CEO Rhys Dyer.
The ooba stats show a nominal 2.9% year-on-year property price growth for Q1 22, with the average purchase price up marginally from R1,386,785 in Q1 21 to R1,426,483 in Q1 22. ‘Despite higher inflation impacting the cost of goods like food and fuel, the average purchase price for first-time buyers is effectively on par with a year ago. So now is a good time to enter the market.’
Gauteng (South/East) remains the most affordable region for first-time buyers, with an average purchase price of R973,499 in Q1 22. In contrast, first-time buyers in the Western Cape paid R1,592,777 – the highest national average during Q1 22, and a record high for the region, says Dyer.
Best you buy
BetterBond CEO Carl Coetzee concurs: ‘Two years of historically low interest rates have encouraged first-timers, accounting for 60% of BetterBond applications, to enter the market.
‘According to data for the year ending April, average home purchase prices in the Eastern Cape, Free State and Joburg South/East were below R1-million, suggesting that parts of these provinces are good hunting grounds.’
Bloemfontein is a boomtown for first-time buyers, the bulk of this activity driven by those aged 30 and younger. Transfers have increased by 6% since 2020 and sectional title units sold almost equal to 2018 levels.
‘Much buyer activity in Gqeberha (Port Elizabeth) is driven by a demand for affordable homes in new developments. First-time buyers make up the majority of PE’s sectional title market, and most of these are women.’
Top-end Cape talk
Michael Bester of Tyson Properties says Hout Bay has benefited from Covid and that, assisted by fellow agent Andrew Poole, all available stock has been sold to upcountry and first-time buyers.
‘We have moved about 30 properties a month since January, at an average price of R4.1-million. Buyer demand and limited stock continue to nudge prices upwards,’ says Poole, adding that the highest sales ever were concluded in Avignon Estate at R9.8-million and R13.25-million respectively.
Options all over
Leading lifestyle apartment property manager Jonathan Kohler says paving the way for first-time home buyers is ‘literally what we do at Landsdowne’, and mentions estates like Ballito Hills, Izinga in Umhlanga, De Aan-Zicht in Milnerton, and The Huntsman in Somerset West as prime examples of estates fitting the bill.
‘Although stock in the Western Cape is notoriously low, projects like Conradie Park in Pinelands – a collaboration between Concor Construction and the Western Cape Government – offer many realistic options for buyers ripe to enter the market.’
Conradie Park has small freestanding homes and a variety of apartment blocks, with prices starting from R600,000 and then entering the R1.5-R2.5-million bracket for bigger living spaces.
Balwin Properties markets three different ranges, labelled Classic, Signature and Green, in Gauteng, KZN and the Cape. While the former is upmarket, the latter category offers a more affordable product particularly attractive to first-time buyers.
Labelled ‘6-star green rated lifestyle centres’, Greenlee in Joburg, Greencreek in Pretoria and Greenbay in Gordon’s Bay cater for a younger generation of clients not only impressed by on-site amenities, but also identifying with Balwin’s zero carbon footprint quest.
Kohler concludes: ‘First-time buyers are attracted by the opportunity to work, play, train and shop where they live, with a pool, gym, spa, restaurant, and free wi-fi all part of the package. This social aspect, the safety factor, and fact that you seldom need to get in your car to leave the precinct combine to present first-time buyers with the perfect lifestyle solution.’