First buys are coming later in life

First buys are coming later in life

Category Property News

First time buyers are stepping onto the property ladder much later in life, with the average age around 36 to 38 years. Two decades ago, the average age was 24, says Dawn Bloch, Lew Geffen Sotheby's International Realty's area specialist in Kirstenhof and Zwaanswyk. More stringent bond qualification criteria and the fact that property has become more expensive are two of the many reasons for this. More are spending money on higher education, and technological devices to support this education, or their social lives. In previous years, families only needed one car. Now it is essential both parents own a car. In addition, many young people own cars to get to university or work, Bloch says. Another reason why many buy their first homes at a later life stage is because they are generally starting families later. Millennials marry and have children later and will often rent until they buy. Poor retirement planning and economic conditions mean more people are continuing to work until later in life than before, she says. The Seeff Property Group's average first time buyer is about 35 years old, but chairman Samuel Seeff says this also depends on the area in which they are buying. Areas where entry price points are lower "tend to have a higher proportion of younger buyers". "Generally, the age of first time buyers is higher now compared to what it was before the introduction of the National Credit Act in 2008. The act has made it more onerous and expensive for buyers to get onto the property ladder." The average age of buyers is also stretching as the costs of buying and barriers to home ownership increase, primarily as a result of pressure on afforda bility and the high costs of buying property, including transfer duty and transaction costs, Seeff says. The average age of Chas Everitt International property group buyers is 21, with the oldest recent buyer 72, says chief executive Berry Everitt. It is "not common" for buyers to be aged above 60, unless they are buying for investment, retirement or for children or grandchildren. If one puts a "deadline" age on buying, Everitt says it would be about 45 years. This is because the usual bond term is 20 years and banks prefer that period to end at around the age of 65. "However, it much depends on individual cir cumstances. Employees who plan to retire in the traditional fashion could be limited while high net worth individuals, who often buy with cash, don't really have any age restrictions." For those in "normal" employment, he suggests they buy by the ages of 45 to 50. "After that the term of the bond may be short ened and minimum repayments become higher."

Author: Lew Geffen Sotheby's International Realty