Weekend Argus (Saturday Edition)
Entry-level market is active, favoured by new blood
ENTRY-LEVEL property markets around the country are “definitely the most active” and buyers in these markets are mostly first-timers, says Gerhard Kotzé, managing director of the RealNet estate agency
A significant number of repeat buyers are also scaling down to smaller homes.
“Areas favoured by first-time buyers are those where there is a good choice of sectional title apartments and townhouses, and especially new developments where they will probably not have to pay transfer duty.”
Such areas, he says, include the northern suburbs of Cape Town, Centurion and the Tshwane suburbs of Faerie Glen and Moreleta Park.
First-time buying is also expected to pick up further in the wake of the new home loan products just launched by banks and which enable buyers not only to borrow 100% of the home price, but also an extra amount to cover transfer fees and bond registration costs.
“This will make home ownership much more accessible, especially to buyers in their 20s who find it extremely difficult to save a cash lump sum to use as a deposit or for transaction costs,” Kotzé says. He expects the average age of firsttime buyers to start dropping.
Although Berry Everitt, chief executive of the Chas Everitt International group, has not noticed “any real” percentage increase in the number of first-time buyers in the group’s main market segment, he expects the new mortgage products to have “some effect”.
The average first-time buyer is “very much a millennial” and that translates into certain property preferences, Kotzé says. These include:
◆ Homes in “walkable” areas and close to shops, restaurants, entertainment, sports venues and educational resources.
◆ A high degree of connectivity as they often work from home.
Millennials make up a significant segment of the market, have very specific wants and are passionate about their beliefs, says Mike Greeff, chief executive of Greeff Christie’s International Real estate.
Real estate professionals must hone their communication and advertising skills to suit this market and know what properties appeal to them.
“Like every other generational segment, price is very significant. Millennials don’t mind spending more on what they want.”
In addition to offering convenience in terms of location, they are also looking for modern fixtures.
“They will almost always choose quality over size and are experience-driven in terms of their lifestyle choices. Low maintenance is the order of the day with most millennials viewing home maintenance as waste of the time,” Greeff says.
Homes must be energy and water efficient and offer pre-installed connections for satellite television. Fibre optic internet lines will “definitely score points”.