The average price paid by first time home buyers rose by 5.8% in the 12 months to end-September due to an uptick in demand in this sector.<\/p>\n
This is according to mortgage originator BetterLife Home Loans, which said that the average first time buyer is paying R739,000 for a house in South Africa<\/p>\n
\u201cOur figures show year-on-year growth of 0.1% at end-September in the percentage of home loan applications made by first-time buyers, compared to the 3.9% decrease in the previous 12 months,\u201d said CEO Shaun Rademeyer.<\/p>\n
Data published by FNB earlier in the year showed that average purchase price of first-time buyers was approximately R801,000.<\/p>\n
\u201cThe rate at which home prices in this sector are growing has picked up and the average percentage of purchase price that first-time buyers are paying in cash as a deposit has also increased in the past year, reaching 12.2% at end-September compared with 11% in the previous 12 months,” Rademeyer said.<\/p>\n
\u201cThis compensates for the fact that the 4.3% increase in the average home loan amount granted to first-time buyers has fallen short of the 5.8% increase in the average home price, and underlines the continued determination among young people to become home owners.\u201d<\/p>\n
Read: What SA banks say about raising the deposit requirements for home loans<\/a><\/strong><\/p>\n Buyers in this sector, Rademeyer noted, are generally people in their late-20s and early-30s with household incomes of between R25,000 and R35,000 a month.<\/p>\n \u201cThey usually spend around 40% of their income on debt repayment (mostly cars and credit card or personal loan balances) and 30% on rent and utilities, which doesn\u2019t leave a whole lot for transport, food and other regular expenses, let alone savings.”<\/p>\n Rademeyer further pointed out that salary increases have been lagging price increases in items such as electricity, transport and food for some time, so the fact that first-time buyers are now managing to save an average of some R90,000 to put down as a deposit speaks volumes about their resolve.<\/p>\n According to BetterLife Home Loans, more than 52% of all buyers are currently putting down deposits of more than 10%, with the current average being 22% of the purchase price.<\/p>\n Rademeyer cautioned that lenders are becoming more cautious in the light of the current low economic growth scenario, and prospective buyers are having to jump through a lot more hoops in order to secure a home loan.<\/p>\n More on property<\/strong><\/p>\n How much money the average house costs a first-time buyer in South Africa<\/strong><\/a><\/p>\n Buying a house in SA just got harder as banks raise deposit requirements<\/a><\/strong><\/p>\n Two signs that show South Africans are worried about the economy<\/strong><\/a><\/p>\n