Homebuying can be an exciting yet daunting task, with first-time buyers having significant questions over the process. <\/p>\n\n\n\n
Despite declining nominal property price growth, young buyers have been a bright spark in the South African property market. <\/p>\n\n\n\n
Although the average deposit as a percentage of the purchase price dropped by 9.3% year-on-year, with it now at R110,039 or 7.8% of the average purchase price in Q4 2022, first-time homebuyers increased their deposit as a percentage of the purchase price by 23.7% year-on-year from Q4 \u201822.<\/p>\n\n\n\n
\u201cThis shows that first-time homebuyers continue to prioritise deposits and understand the importance of savings \u2013 regardless of the climate,” Rhys Dyer, CEO of ooba Group, said.<\/p>\n\n\n\n
“This statistic cannot be underestimated as it sets the tone for a potential surge in first-time homebuyers once interest rate cuts commence.” <\/p>\n\n\n\n
With interest rates set to drop in the latter half of 2024, Richard Gray, CEO of Harcourts South Africa, has provided a host of tips for first-time homebuyers: <\/p>\n\n\n\n
1. Assess Your Financial Health:<\/strong><\/p>\n\n\n\n “Before diving into house hunting, it\u2019s crucial to get a clear picture of your financial situation,” said Gray.<\/p>\n\n\n\n He said that potential buyers need to review their credit scores<\/p>\n\n\n\n He advises potential buyers to review their credit scores, debts, and savings to understand what they can afford.<\/p>\n\n\n\n 2. Understand the Total Costs:<\/strong><\/p>\n\n\n\n Gray said that the price of a home is not just the purchase price. <\/p>\n\n\n\n “Remember to account for sales costs, property taxes, insurance, and maintenance expenses.”<\/p>\n\n\n\n He encourages buyers to budget for these additional costs <\/p>\n\n\n\n 3. Get Pre-approved for a Bond:<\/strong><\/p>\n\n\n\n “A home loan pre-approval will give you a better idea of how much you can borrow and demonstrates to sellers that you\u2019re a serious buyer,” Gray said. <\/p>\n\n\n\n He said that consumers should shop around to find the best rates and terms.<\/p>\n\n\n\n 4. Make a Wants vs. Needs List:<\/strong><\/p>\n\n\n\n Knowing one’s needs vs wants is crucial in a home-buying decision. <\/p>\n\n\n\n Gray said that essential features should be considered before amenities. <\/p>\n\n\n\n 5. Research the Market and Neighbourhoods:<\/strong><\/p>\n\n\n\n “Spend time researching the neighbourhoods where you might want to live to understand market trends and community amenities.” <\/p>\n\n\n\n He said that this will help buyers find a location that suits their budget and lifestyle. <\/p>\n\n\n\n 6. Consider Long-Term Resale Value:<\/strong><\/p>\n\n\n\n Buyers need to consider the future resale value of a home. <\/p>\n\n\n\n “Look for properties with features that will be appealing to others when it\u2019s time to sell,” he said.<\/p>\n\n\n\n 7. Work with a Real Estate Agent:<\/strong><\/p>\n\n\n\n “A knowledgeable real estate agent can save you time and help negotiate the best deal.”<\/p>\n\n\n\n An agent with experience in the local market are best. <\/p>\n\n\n\n 8. Be Prepared for Bidding Wars:<\/strong><\/p>\n\n\n\n Buyers may need to prepare themselves for bidding wars in a competitive market. <\/p>\n\n\n\n “Stay calm and stick to your budget,” Gray advises, emphasising the importance of not overstretching. <\/p>\n\n\n\n 9. Have the Home Inspected:<\/strong><\/p>\n\n\n\n “Always have a professional home inspection done before finalising the purchase.” <\/p>\n\n\n\n An inspector can find potential issues that could cost a substantial amount of money to fix.<\/p>\n\n\n\n
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