South Africa’s youth finds itself in a precarious state. Millions are without jobs, while others work in places where they get below the minimum wage.
Even those who are employed find themselves in uncertainty as food and fuel prices surge. As a result, first-time homebuyers’ ages keep going up.
Because of affordability, first-time home purchasers are getting older. The ages rose from around 30 to 32 years to approximately 38 to 40 years, said Sentinel Homes.
Home ownership is a route to financial security. Because there is no restriction requiring your first property to be a residence, you have the choice to purchase the home you can afford as the best way to get started.
Over the last 70 years, asset values have risen significantly faster than wage growth, and this tendency is expected to continue. Simply put, homes are getting less affordable.
This is according to the MD of Sentinel Homes, Renier Kriek.
"If the trend of decoupling asset and wage prices is going to continue, the best bet is to get into the property market sooner rather than later. Particularly when there are so many bargains to be had.
You must get in earlier to buck this trend. If you wait until you can afford your dream home, you may never be able to achieve that goal," explained Kriek.
It is currently a buyer's market. According to Kriek, South Africa is emerging from a high-inflation, high-interest-rate cycle. "Inflation has become a more manageable beast, and market watchers are starting to predict a decline in interest rates next year."
Here are the expert’s tips on how you can get your own home as early as possible:
Time the market
Sadly, few individuals act until the first rate decrease is announced. By then, the cat is out of the bag, and the market will alter quickly. You have to buy now if you want to time the market.
First-time purchasers who can afford to purchase a real estate asset at current interest rates will most likely be able to do so throughout the cycle, and they will be unlikely to purchase a home they cannot afford.
The ugly duckling may be a better starting point than the shiny house on the hill.
Real estate, whether it is your primary residence or an investment property, has costs and tax implications. However, if you do not want to live from salary to salary for the rest of your life, you must make some sacrifices in order to enter the real estate market.
Take the leap
Make a deposit; it offers you negotiating power to get a cheaper interest rate.
Examine tenant vacancy rates and payment habits in various locales.
Be alert, notice, and capitalise on financial possibilities.
Don't get too mired down in the preparations; you must eventually take the plunge and buy.
Never underestimate the value of leverage. That is, you are leveraging other people's money to increase your investment returns. Residential real estate is the most secure way to employ leverage to develop wealth.
Because of the power of compounding, the sooner you begin, the better.
IOL