Data from Lightstone reveals that in 2020, first-time buyers were snapping up properties priced between R700,000 and R1.5m.
Gauteng was leading recording the highest number of first-time property buyers.
First place goes to the township of Drieziek in Orange Farm, Gauteng, which recorded 345 home purchases. In second place is Electric City in Eersterivier in the Western Cape, with 177 property purchases.
Hayley Ivins Downs, Lightstone head of sales, points to several reasons for a surge in first-time home buying activity.
These include affordable property prices (following a correction in asking prices), young people are saving for much longer before committing to purchase property, and support from parents when buying.
Low interest rates and banks granting home loans (100% in some cases) has also boosted first-time home buying.
Furthermore, Downs says many buyers are moving away from RDP developments in or near townships to be closer to work.
First-time home buying to continue into 2021
Ooba predicts that the residential property market will continue to show strong levels of activity, driven mostly by first-time buyers.
Rhys Dyer, ooba CEO says applications from first-time buyers increased by 36% in the fourth quarter of 2020, with a 59% increase in value growth.
He explains that banks were prepared to give 100% loans to first-time buyers. “These loans rose 39% year-on-year, with 80% of first-time buyers successfully obtaining finance.”
Dyer says they expect to see continued buying activity from first-time buyers purchasing properties priced between R500,000 and R2m.
Pam Golding Properties notes that since June/July 2020, the residential property market has been buoyed by first-time and other home buyers. These buyers sought to capitalise on the record-low interest rates, coupled with value-for-money opportunities in the current economic environment.
According to Dr Andrew Golding, chief executive of the Pam Golding Property group, changing lifestyles and residential property preferences to suit the ‘new normal’ resulting from the pandemic also boosted activity.
“We expect demand from first-time buyers to continue into 2021 for buyers purchasing properties priced below R1m. Properties in this price bracket have zero transfer duty payable,” he says.
Dr Golding says properties below R2m in sought-after suburbs appeal to many first-time buyers with the means to purchase.
In Johannesburg, for example, it is possible to find value-for-money homes priced below R2m in sought after Parkhurst.
Properties ranging from R650,000 to R3m are very popular with buyers in Johannesburg South. Well-priced properties continue to sell well, says Dr Golding.
He notes that suburbs close to schools are most resilient, and these include Glenvista, Mulbarton, Aspen, Brackendowns, Brackenhurst, and Lenasia.
“In Johannesburg South, we are seeing larger deposits than usual and cash purchases, with banks remaining willing to extend mortgage finance.”
Edited by fellow-Safrean Gudrun Kaiser.