An increasing number of estate agents believe that young South Africans lack the funds to get a foot on the property ladder, but data from Standard Bank paints a different picture. <\/p>\n\n\n\n
According to FNB’s latest Estate Agents Survey, youth participation, defined as mortgage acquisitions by buyers under 35 years of age, has continued to drop steadily since 2010, except for a brief period in 2020\/21 when interest rates were cut to record lows amid the pandemic.<\/p>\n\n\n\n
The survey shows a significant increase in real estate agents who believe incomes have not kept pace with house prices. <\/p>\n\n\n\n
Since the start of the interest rate hiking cycle in 2H21, the proportion of agents reporting incomes falling \u201cfar behind\u201d house prices has grown from 24.5% to 39% in 1H24. <\/p>\n\n\n\n
“This highlights the growing disparity between what people earn and what they need to pay for housing amid elevated debt-service costs,” said FNB.<\/p>\n\n\n\n
“Consequently, mortgage volumes have fallen below pre-pandemic levels, reflecting the difficulty many South Africans face in securing financing, especially first-time buyers.” <\/p>\n\n\n\n
There has also been a notable shift in how first-time buyers finance down payments. <\/p>\n\n\n\n
In the past, many relied on 100%+ loan-to-value (LTV) mortgages, allowing them to purchase properties without needing a substantial down payment. <\/p>\n\n\n\n
That said, tighter lending standards have made these mortgages far harder to obtain.<\/p>\n\n\n\n