Getting a toehold in the property market as soon as possible is a smart move – even for young single people taking their first steps on a career path.
That’s the word from Rudi Botha, CEO of BetterBond, SA’s biggest bond originator, who says young adults who hold off on buying their first property until they have settled in to a new job or until they get married are losing out on an opportunity to start building real wealth.
“It is true that as a young person you may be a prime candidate for company transfers, especially if you are single and newly-qualified. You may also be worried about getting ‘stuck’ with a property that your future partner won’t like or is too small for a family.
“But a residential property is not just a place to live. It is also an asset that appreciates in value, unlike cars, clothes, furniture and other things that young people tend to buy, and a great savings mechanism at the same time.”
According to the latest FNB House Price Index, he notes, property prices in SA are currently 90,8% higher, in real (after inflation) terms than they were in 2001. “In simple terms, this means that the property buyer who bought a R1m property with a R100 000 deposit (investment) in 2001 would have made a return of almost 1000% on that initial investment, and the younger you are when you buy, the more chance you have of achieving such long-term returns.