'The right age to buy a property'

Lately there have been a lot of enquiries from young buyers looking to buy their first home. The market has seen young buyers entering the property market, and the older population selling and scaling down.

This has raises the question of what the right age is to buy a property. Engel & Völkers Southern Africa believe that the sooner you plan on buying your first home the better.

As soon as young people finish their studies and move into the working sector they should immediately do their research on buying. This however does not mean you will be able to buy immediately.

Obtaining the necessary deposit that banks need when applying for a bond does sometimes take years to build up, this means that it would be unlikely that a young buyer would be able to get a loan within his first 2 years.

Engel & Völkers shops shared their views on when to buy and what the average age is for buyers in their respected areas.

According to Graham Theobald Licence Partner of Engel & Völkers Plettenberg Bay the average buyer in this area is around 55 years old and their youngest buyer was only 25. Seeing that Plettenberg Bay relies highly on the second home market, having younger buyers indicates that their market is opening up to buyers looking for their first homes too.

In the Cape town CBD Director of Engel & Völkers Sea point George Norris noted that they just sold a property to a 23 year old, however the youngest buyer was 18. If one looks at property values over a long term basis, property has always proven an excellent investment. "Safe as bricks and mortar". He also says that property is an asset which will not only achieve capital growth, but with a good tenant you will also receive a return on investment. It is an educated investment which will grow in value.

On the East Coast the age of buyers can be compared more with the likes of Gauteng. "The average age of buyers in the market range from 28 to 50. The youngest buyer we have had was 28. I think it is a better move to buy at a younger age if a person has the opportunity to purchase a property. The market value can strongly increase in the coming years of your ownership. If you are selling at an older age, you will most definitely get excellent returns on your investment, thus making room for a more comfortable retirement," says Conrad Vorster Team Leader of Engel & Völkers Umhlanga.

Seeing such a young buyers market in the coastal areas, Gauteng buyers differ when it comes to the age of buying- "The age of buyers in Centurion vary from early twenties getting on the property ladder by purchasing small townhouses to successful young executives moving up the property ladder, purchasing more expensive homes, to pensioners downscaling and purchasing smaller secure homes," says Wendy Williams Licence partner of Engel & Völkers Centurion. "The younger you can buy the better but also remember that there are things like transfer duty fees and bond costs which many first time buyers are unaware of. Standard Bank has just launched a product called Jumpstart which assists first-time buyers in obtaining a bond which includes all these costs," Wendy added.

"In the old east area of Pretoria you find buyers to be in their late 30s to 50s. This area is usually associated in the higher income bracket and therefore younger buyers do not have the means to afford a property here," says Cristina Rosa a Property Specialist for Engel & Völkers Waterkloof. "The younger you are when you buy the quicker you can pay your property off and more debt free you can be. With less debt comes more credit, should you want to invest in more properties later in life," Cristina added.

In areas such as Bryanston in Johannesburg, the age groups are more or less the same as in Pretoria`s Old East. According to Debra Campbell, licence partner of Engel & Völkers Bryanston, knowing the quality of the developers building standards, for long term sustainability of the complex, which in turn will influence the resale value, is very important for young buyers to know. The buyers in this area range between 30 and 50 according to her statistics. "Property will never get cheaper, building costs will always escalate, and it is very visual how lifestyle living has changed from large homes to small complexes. Should young people invest in property at a young age, they may have the opportunity of time to buy and sell and eventually own a home of their dreams in their latter years," Debra added

Cynthia Lindgren a property specialist for Engel & Völkers Hartbeespoort says that as soon as you can afford all the costs involved you should buy your first property. This gives a person time to complete their bond payment at still a very young age. She also said that buyers in the Hartbeespoort area are usually between the ages of 35 to 40, which indicate their market as one that is more for families looking to start up somewhere.

When you look at areas such as Potchefstroom you might find a different perspective again. In Potchefstroom the housing market consist of a lot of student apartments, with this you will find that the average age of buyers is around 50 years old. According to Engel & Völkers Potchefstroom this shows that you find a lot of investors buying student homes as an investment and also shows that there are a lot of buyers who buy these properties specifically for their children when they go and study in Potchefsrtoom.
There are also buyers that have had help from parents to buy properties as investments. Blaar Coetzee CEO of Engel & Völkers Projects says they have had a buyer that bought a property from them at the age of only 21 with assistance from his father. According to Blaar there are costs involved once you have bought a property that a young buyer should be aware of for example the rates and taxes as well as maintenance, insurance and levies.

In towns such as Lydenburg the chances for young buyers to come into the market is very limited. Odette du Preez Property specialist for Engel & Völkers Lydenburg says that their stats show the average age of a buyer is above 40, this is because younger buyers tend to move to areas such as Nelspruit and the Gauteng cities.

Studies have shown that buyers usually come into the market at age 26-35 when they have had a few years to settle into their environment after their studies and save up for a deposit. "Buyers aged 26 usually buy small apartments or town houses as a start up. When they reach their 30s they do tend to have settled into more a family situation where they look at properties that have more rooms and a garden and maybe swimming pool depending on the buyer's situation and needs

"There are a few options one can look at. In some cases young buyers have the luxury of parents willing to assist them with their deposit. The other way is the grant given by government for people earning between R3 000 and R15 000 a month to help them with their deposit. "This would be the best way for young buyers to go, as they fall into that income bracket as soon as they start working," says Craig Hutchison CEO of Engel & Völkers Southern Africa.

"The current market is perfect for new young buyers. With low interest rates and banks being more relaxed in regards to their lending criteria, young buyers can easily enter the market now, and should invest in property as soon as possible. Always bear in mind that bonuses or windfalls should be applied against your bond rather than being spent on lifestyle enhancements such as new cars.", Craig concluded.

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