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Single and buying property? Read this

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Not only are more homes being bought by singles, increasingly the majority are women, say analysts. By Alan Simmonds

Five tips if you are single and considering buying a home from Camilla Cheung for Wise Bread:

◆Understand the risks: As a single person, owning may cost more than monthly rent when you consider insurance, tax, maintenance and utility bills; you’re also taking on greater risk by taking a loan. But when you own on a fixed-rate, 20-year mortgage, you can make a concrete plan without worrying about housing. If you plan to stay in the property for several years, consider buying and wait for market appreciation to make a profit.

◆Review your finances: Having only one income to rely on can stretch you financially; go over your finances before considering a purchase. You’ll also want to improve your credit rating before buying.

◆Consider the stability of your income and whether you have enough savings to see you through if something happens to that income: As a single person, you will want to have a large savings buffer. Rule of thumb is your emergency fund should have six months’ income – nine if your income is unpredictable. 

◆Calculate hidden costs: Don’t be surprised by the “hidden costs” of owning a home, including the closing costs, property taxes, insurance, possible homeowners’ association fees, utilities, maintenance and potential renovations.

◆Talk to a mortgage broker: As a single person, it can be more difficult to qualify for a loan because you can count on only one income. If this is your first home purchase, you may be able to qualify for a loan which allows you to buy with a lower down-payment and lower interest rates.

Talk to a mortgage broker or financial adviser about whether it makes sense for you to pay a lower down-payment. You may have to obtain mortgage insurance if you don’t put enough money down, so factor those costs into your decision.

◆Choose the right home: It’s better to buy a two-bedroom than a one-bedroom. If you lose your job or the economy wilts, you can take on a roommate to help you share costs. On the other hand, if you get married or your partner moves in, you have enough space for the next step in building your family.

Either way, you won’t have to sell immediately if something changes. In addition to potential financial benefits, there are a lot of intangible benefits to owning your own home. Pride in your own home, the ability to control things about your living situation that you couldn’t control as a tenant and the feeling of being more settled, are all attractive reasons for a single person to buy a home.

There’s a rumble in the bricks and mortar jungle. More single men and women are investing in property. Moreover, US and South African property experts predict the single woman will dominate the market.

What began in the UK as Mrs Pankhurst’s demand for votes for women in the early 20th century, then post World War II women’s lib morphing into the women’s empowerment struggle, is bearing more fruit.

It is estimated women control 51% of wealth in the US and are projected to control two-thirds by next year, according to a Fidelity study. And US predictions are mirrored in South African figures says FNB home finance chief executive Lee Mhlongo.

“Based on property research group Lightstone statistics, we’re likely to see more women property buyers than men in the next two years; in South Africa about 72 000 single women obtained properties in 2018,” he says. And figures indicate single home buyers dominate Gauteng and Western Cape property markets; married couples outweigh other buyer types in the Eastern Cape and KwaZulu-Natal.

Last year a US Zillow study indicated although single women could afford to purchase only 39% of homes on the market, they bought at a rate that far exceeded that of single men; 18% of home buyers in 2017 were single women, up from 11% in 1981 according to the US National Association of Realtors, but only 7% of single men bought a home last year.

The reasons for this move are clear. An increase in divorces, delayed marriages, more adoptions by singles, single parenting without marriage, higher incomes, active retirees, widowship and personal satisfaction are cited as the main catalysts. Also, more men now prefer to remain single.

“In South Africa, Bloemfontein claims the title of having the youngest active real estate market,” says Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa. From a national perspective, BetterBond’s statistics, based on Lightstone reports, indicate the average age of first-time buyers is 34.

“Broken down, Cape Town has the oldest buyer profile, Pretoria is placed somewhere in the middle, and Bloemfontein has the youngest active real estate market,” says Goslett. Between June 2018 and May 2019, a total of 38% of Cape Town buyers were aged 18 to 35, while 33% were between 36 and49, 20% were aged 50 to 64, and 9% were over 65.

In Pretoria, 46% of buyers were 18 to 35, while 34% were 36 to 49, 15% were 50 to 64, and 5% were 65-plus. In Bloemfontein, 47% were 18 to 35, 33% were 36 to 49, 14% were 50 to 64 and 6% were 65-plus.

“Considering the Western Cape is the most expensive at R2.5m median price and the Free State lowest at R1.1m, it’s understandable younger buyers can afford to enter the market there.”

Goslett said the 18 to 35 age bracket was the largest buyers’ bracket, a fact sellers ought to keep in mind. With student debt in South Africa nearing the R10 billion mark, this is likely to impact on property acquisition before long. South African millennials are playing catch-up on owning property.

Although tough economic conditions mitigate against ploughing newly found largesse into property, many realise their security at a later age depends on such an investment. This can be seen with the rapidly emerging desire to go back to roots and become owners in former townships.

Lightstone itself has the last word – “single females dominate in freehold sales for new properties,” the way the market is trending.

Consider, calculate and review

Almost 72 000 single women bought residential properties in South Africa last year, according to the research group Lightstone, making them the largest single group of property buyers in South Africa – bigger than married couples or single men.

But single women still buy cheaper homes compared to the other groups; since 2013, women have been the main buyers of houses below R250 000.  Is it safe to invest in property in South Africa? “Nobody is coming to take your house. It is still safe to invest in property,” says bond originator ooba.

The national average purchase price in Q2 2018 was R1.05m, and the average price over the same period for a first-time buyer was R824 558.


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