Property Barometer - First Time Buying Slowing

According to the latest First National Bank’s Estate Agent Survey, first time home buying has slowed down mildly as the average buying age has risen in the first quarter of 2016.

The FNB report states that residential demand is still the driving factor behind housing demand, accounting for an estimated 21% of total home buying, although this was down from 26% from the previous quarter.

Normally percentage estimates can be volatile from quarter to quarter but the recent quarter’s estimates have remained below the multi-year high point of 28%, reached in the 2nd quarter of 2014.

This percentage nevertheless remains solid compared to the 12% low reached around
recession time back in 2008.

The sample of agents’ surveyed has pointed to a very significant percentage of 1st time buyers suffering from “buyer panic” in recent surveys. However, this percentage has begun to subside over the last 2 quarters, from a high of 54% in the 3rd quarter of 2015 to 48% of 1st time buyers by the 1st quarter of 2016.

On a 3-month moving average basis (for smoothing purposes), they identified an average 24,016 such transactions per month for the 3 months up to December 2016. This level is only around 39% of the boom time peak volumes late in 2003.

Therefore, this translates into a far lower absolute number of young buyers, and thus of 1st time buyers today compared to back in the boom times, even though as a percentage of total
volumes they may look reasonably strong.

Examining the total number of individual buyers below the age of 40, of which a sizeable portion would be 1st time buyers. Their numbers by late 2015 were only about 34% of that late-2013 highpoint.

 In the near term, a slow economy, rising interest rates and a slowing residential market, are expected to lead to further broad slowing in 1st time buying both as a percentage of total buying and in total volume terms, as well as leading to a further rise in the average age of home buyer. 1st Time Buyer Panic, too, is expected to diminish in significance. This is normal in toughening economic and interest rate times, with 1st time buyers normally being more cyclical as a group than the overall market, waiting on the sidelines in larger numbers in the tougher times, and growing in number more strongly than the repeat buyer group as times improve.

Read the full report here 

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us