Millennial buyers are piling into the property market despite the belief that they would rather rent. This is no surprise, says Samuel Seeff, chairman of the Seeff Property Group, we are in the “perfect storm” for young homebuyers who are using the benefits of buying right now and taking the property market by storm.
Seeff’s first-home buyer areas, especially in the main urban areas, all report a surge in buying activity over the last three months, largely driven by the under-35-year-olds.
The transfer duty saving on properties below R1 million and favourable mortgage lending conditions, with some banks still granting full loans, combined with the low-interest rate means that Millennial buyers can get into a property or suburb, which they might not have been able to afford a year ago, says Seeff.
Tiaan Pretorius, a property consultant with Seeff Centurion says that any step onto the property ladder is a step in the right direction. Your first property may become part of your future property portfolio or can be sold for a deposit on your next property.
The great news for starter buyers is that South Africa’s powerhouse, Gauteng remains the top choice for affordable properties with the R450 000 to R1.2 million range picking up the bulk of activity currently. Most areas offer access to good transport networks and a host of amenities including access to shops, banks, schools and more.
The most popular areas include:
Up to 40% of buyers in the Protea Glen area are Millennials according to Khosi Sibiya and Phindile Mphahlele, managing directors for Seeff Soweto. The popular price band is R400 000 to R700 000 for first-time buyers. Protea Glen is an excellent choice for its affordability and amenities and offers great value compared to suburbs in the Johannesburg South region.
Randburg offers a vast range of affordable suburbs according to Duane Butler, Seeff licensee for the area. Areas such as Weltevreden Park, Allens Nek and Olivedale are currently a top choice for Millennial buyers as they offer access to great schools and amenities. You also have easy access to the highway and several main arterials. Prices start from just R500 000 for sectional title properties making it attractive for first-time buyers.
Midrand offers great value for those working in Johannesburg, Sandton, Midrand or Pretoria as it offers easy access to the N1 and M1 highway interchanges. With prices from just R400 000 in Glen Austin it is no surprise that Millennials comprise about 40% of the market. Noordwyk is another popular choice offering townhouses and houses from just R700 000 to R800 000.
Charles Vining, MD at Seeff Sandton says that apartments are especially ideal for first time buyers and there is a broad choice of suburbs where they can buy in right now. Apartments and small townhouses in the R600 000 to R800 000 price band in areas such as Paulshof, Douglasdale and Lonehill are popular. Townhouses in the R700 000 to R900 000 range are popular in suburbs such as Buccleuch, Douglasdale, Sunninghill, Broadacres and Paulshof. Sectional title property is also drawing interest from buy-to-let investors given the high demand for rental accommodation near the Sandton CBD.
Tiaan Pretorius from Seeff Centurion says that first time buyers have increased and are active in the R700 000 to R1 million range if buying on their own and up to R1.8m if buying jointly. Centurion is an attractive area for affordability with many units close to major highways, the Gautrain Station and all facilities in Centurion City. Popular suburbs include Centurion West, The Reeds and Die Hoewes. The latter for example offers 6 300 sectional title units priced from just R545 000 with about 30% of the market comprising of Millennial buyers.
Equestria and Moreleta Park are ideal steppingstone neighbourhoods for newcomers who wish to establish themselves as real estate owners and may at a later stage upgrade to more expensive property, says Gerhard van der Linde, MD for Seeff Pretoria East. Another popular area is Sunnyside which offers a great location and some 8 474 sectional title units priced from as low as R350 000.
Van der Linde reminds young buyers that they should start their homebuying journey by getting a pre-approval done so that they can buy with confidence. It saves a lot of time, especially in this market where you want to take advantage of the favourable conditions as quickly as possible.