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How to buy your first home

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Single women join the move to become SA’s new homeowners following good news in the 2020 budget. By Bonny Fourie

First property buyers are taking full advantage of housing market conditions and will continue reaping benefits after the 2019/2020 national budget outline.

The increase in the transfer duty exemption threshold plus the personal tax relief announced by Finance Minister Tito Mboweni will add further incentives for aspiring homeowners to take their first steps on the property ladder.

Statistics from bond originator ooba shows that just more than 50% of applications during the past six months were from first-time buyers. The average purchase price was R1 million, says head of sales Kay Geldenhuys.

“Therefore, raising the threshold for transfer duty exemption to R1m will certainly help to get more firsttime buyers onto the property ladder.” The average age of ooba’s first-time buyers is 34, one year older than the average age in 2010 and the trend is towards secure, low-maintenance sectional title units.

Geldenhuys says banks are increasingly granting loans of 100% and more of the purchase price, so aspiring homeowners should take advantage of the current positive lending environment and lower interest rates to enter the property market.

The new transfer duty exemption should see an increase in first-time buying in Muizenberg, an area Rawson Properties franchisee Errol King says traditionally offers “excellent value for money” for these buyers.

“Banks are eager to do business, and our first-time home buyers mostly have no difficulty obtaining a bond. In the past it was common for parents to sign surety on a bond, but this has changed as the banks now require surety to be a co-owner.

“We can only assume the first-time buyers receive deposits from parents or grandparents to assist them with their first investment.” King says buyers are attracted to houses below R1.4m and the franchise’s most recent first-time buyers were aged from 25 to 33 years.

In Cape Town, generally, there has been a steady rise in first-time buyers as banks have been “far more aggressive” when lending, says Tim Greeff, sales director of Greeff Christie’s International Real Estate. The transfer duty threshold adjustment will result in further demand from these buyers.

“Buyers can save as much as R17 000 on a R2m home. The adjustment certainly relieves financial pressure for many entering the market for the first time.” 

While many first-time buyers purchasing homes under R2m are buying in their own capacity, Greeff says those buying properties for more than R3m – “especially in suburbs in good school districts” – are being helped by family.

“The majority of first-time buyers in the southern suburbs is purchasing sectional title homes below R1.25m. These properties are 50m² to 80m² and are ideal for couples starting out, even if they are expecting to grow their families in the near future.”

In the Saldanha and Vredenburg areas, first-time buyers are mostly transacting in the R800 000 to R1.5m price range, says Darrelle Visser Scheepers, broker/owner of Re/Max 1st Realty. The average age of these buyers is 35.

“There are also lots of single females in the first-time buying segment.” She says more first-time buyers are co-purchasing with friends or partners. Since September 2018, 50% of the properties sold by Marc Plastow, area specialists for Lew Geffen Sotheby’s International Realty in Kenilworth, Claremont and Harfield Village, has been to first-time buyers.

Of these, about half were assisted by family members and 25% purchased jointly. Most transactions are taking place in the price range up to R2m, and 70% of the buyers in these areas are purchasing apartments, he says, adding that the average age of first-time buyers is 29.


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