Tshwane is the standout area for first-time buyers in South Africa

 ·11 Apr 2018

FNB has released its latest estate agent survey, focusing on couples and first-time buyers in South Africa.

Despite improved positivity surrounding South Africa (and the property market), FNB found that first-time buyers don’t yet appear to be sharing in the improved sentiment.

The estimated average first-time home buyer level was 17.6% of total home buying nationally, which is lower than the 20.28% of the previous quarter, and well off the high of 28% reached in the 2nd quarter of 2014.

Regional

When analyzing the survey responses across major metro regions, however, some major differences become apparent.

“We use a two-quarter moving average for first time buyer percentages by regions to boost sample size,” said FNB property sector strategist, John Loos.

“And for the 2 summer quarters of 2017/18, we find Gauteng still to be the strong first time buyer region on the one hand, and Cape Town to be the very weak first time buyer region on the other.”

Greater Johannesburg had an estimated first time buyer percentage of 21.59% for the two quarters, and Tshwane Metro a massive 30.75%.

In the three major coastal metros, Ethekwini Metro had the highest rate (20%), while Nelson Mandela Bay a weak 10.5%, and Cape Town Metro a very low 6.46%.

“These major divergences partly reflect diverging home affordability trends in recent years,” said Loos.

“FNB believes that slow house price growth in Gauteng over the past decade or so has greatly improved home affordability (average house price/average household income ratio), whereas at the other end of the spectrum, Cape Town’s home affordability has deteriorated significantly during recent years of greater market strength and strong house price growth.

“And right now, the Western Cape’s economy appears under some threat from a severe drought, which could be contributing to greater aspirant home buyer caution, with many perhaps adopting a ‘wait-and-see approach’ to home buying,” he said.


Read: How long it takes to sell a home in Joburg, Cape Town and other major cities right now

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