The average age of the first time house buyer in South Africa

According to the FNB Estate Agent Survey, for the 1st quarter of 2016, first time home buying slowed when expressed as a percentage of total home buying.

This source of residential demand remains a significant source of housing demand, accounting for an estimated 21% of total home buying, but was down on the prior quarter’s 26%, the bank said.

While the percentage estimate can be volatile from quarter to quarter, recent quarter’s estimates have remained below the multi-year high point of 28%, reached in the 2nd quarter of 2014, and the smoothed trendline has recently moved lower.

This percentage nevertheless remains solid compared to the 12% low reached around recession time back in 2008, FNB said.

According to the survey, the average age of the the first time property buyer in SA has increased over the past several years.

Average age of property buyers

“Young aspirant home buyers are highly sensitive to economic changes and affordability changes. They are also driven by sentiment, and are highly sensitive to changes in bank lending criteria, being heavily dependent on credit as a group.

“For many, the response to a deterioration in home affordability, brought about either by rising real home values or by interest rates, or a weaker economy with slower job creation, is to wait for longer to buy a home. Indeed, even in recent times this appears to have been the case,” FNB said.

A relatively strong market period through 2012 to 2014 appeared to contribute to a decline in the percentage of individual property buyers between the age of 20 and 29, from 16.34% of total buyers in the 3rd quarter of 2011 to 13.63% in the final quarter of 2015.

This percentage is now sharply down on last decade’s 20.81% high of February 2002. At that stage, real house prices were far lower than today.

And the result is that the average age of individual property buyers of late is near to 44 years (43.82 years old as at February 2016), which represents a significant rise from the 40.65 year estimated at the end of 2007, right at the end of the boom period.

The average home buyer age for 2015 rose very slightly, from 43.7 years in 2014 to 43.8 years, FNB said.

Percent of property buyers by age

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The average age of the first time house buyer in South Africa