Trouble for first-time home and car buyers in South Africa

Younger South Africans are buying fewer properties and cars, according to Lightstone data.

Lighstone said that in 2012, those aged under 35 accounted for 39% of new car purchases and 45% of property purchases above R20,000.

Despite this, in 2022, these numbers dropped to 31% and 38%, respectively, said Lightstone. Some of the largest assets that require lending have not been looked into by younger consumers only until later in life.

Lightstone said that youth buy properties later in life, with 2017 and 2022 volumes being as high as 35 years of age compared to 29 in 2012.

Lightstone reported that property transfers (of properties transacting for more than R20,000) to youth over the past ten years have declined from 87,675 (45%) in 2012 to 81,519 (40%) in 2017 and 69,304 (38%) in 2022.

The graph below shows property transfers (value >R20k) to the youth:

The most popular property band for younger South Africans is between R500,000 and R1 million, with 44% buying homes within the range. The second most popular was between R1 million and R2 million (39%), while the third, at 34%, was between R200,000 and R500,000.

Although there was a decrease in overall property sales, the fall in youth sales is far more radical.

Over the span of ten years, the average price of purchases made by youth has shown an upward trend.

Starting from R700,000 in 2012, it rose to R930,000 in 2017 and further to R1.2 million in 2022. However, this increase is primarily due to inflation in house prices rather than the acquisition of higher-value assets, as indicated by the graph depicting the spread of asset values based on current values.

“Property sales suggest, in addition to declining property transfers, those under 35 are switching to the lifestyle benefits offered by Sectional Title properties, they are buying later with the average age of First Time Buyers being higher than it was ten years ago, and they are increasingly buying solo,” Lightstone said.

Vehicles

Sales of vehicles to the youth were also recorded as lower. According to Lightstone Signio, a vehicle finance platform, the youth accounted for 31% of new car sales in 2022 compared to 39% in 2012.

As a proportion of used vehicle purchases, youth purchases have steadily decreased over the last decade. In 2012, they made up 41%, while in 2022, 39%.

The table below shows the change:

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