First-time buyers to

enter the market”

“Where would many of these aspirant young homebuyers go? Probably in many cases into the rental market for the time being, saving up to purchase a home at an older age,” suggest Loos.

This week’s holding of the current interest rate at 7% by the South African Reserve Bank, however, does bring some relief to the real estate industry, and “allows potential buyers and current bond holders to plan with more certainty over the next few months”, says Mike Greeff, CEO of Greeff Christie’s International Real Estates. A stable interest rate is vital particularly for the younger would-be first-time purchasers, says Greeff.

This sector is already facing not only an affordability issue, but also the extra challenges posed by the introduction of the National Credit Regulator.

“This has made obtaining a housing bond more onerous for youngsters,” says Seeff chairman Samuel Seeff.

Lew Geffen, chairman of Lew Geffen Sotheby’s International Realty, says what tighter lending criteria means for people wanting to apply for bonds is that even though “they might not be one of the nearly 10 million debt-ridden South Afri- cans with tarnished credit in the third quarter of 2016, as reported by the National Credit Regulator, banks are tightening lending criteria, and are only approving applicants they believe are very close to being a sure thing”.

“It has become increasingly difficult for first-time buyers to enter the market in Cape Town, with many prospective buyers forced to rent for longer while they save for larger deposits,” says Geffen.

Seeff concurs. He says young job market entrants will start off in the rental market and later migrate to buying a property.

“Property ownership ranks high with younger, first-time buyers,” he says.

“Generally, first- time buyers tend to range upwards of 28 years old, if they are professionals earning good salaries, or if they are buying jointly. It becomes easier to buy a home as their income increases, which generally tends to be in their early thirties.”

Although heavily dependent on individual buyers, the price range for first-time buyers tends to be up to R1.5 million in most metros, Seeff says, but for the Cape metro it can range up to R1.8m. Couples and joint buyers may buy for up to R2m.

Sectional title property is also usually more affordable for firsttime buyers, with many options from R1.2m to R1.8m.

Seeff says they have seenfirst-time buyers mostly purchasing in “smaller, more compact homes which are on offer in many areas across the city. There are many older houses in areas such as Bothasig and the northern suburbs, such as Kraaifontein, where you can still find a small two- or three- bedroom house for under R1.5m. Kraaifontein, while further from the city, has an excellent transport network”.

A typical Kuils River home.