Today’s first time buyers plan carefully, and are specific in what they require from a property.
Although the real estate market has seen many changes over the recent years, one thing that hasn’t changed is the fact that first-time buyers are an intricate part of the housing market globally, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
Goslett points out that First National Bank’s property figures show that the number of first-time buyers has increased and now account for nine out of 10 buyers in the affordable housing sector. Goslett says that because first-time buyers are such an important part of the market, it is vital to know what they are looking for in a property. He notes that while affordability is a key factor for most, many are looking for homes that are close their workplace and amenities as well as proximate to major transport routes. Some first-time buyers also want homes that are large enough for them to be able to expand their family at a later stage.
“More and more first-time buyers are gaining confidence in property as an investment and are eager to get their foot on the first rung of the ladder. Sentiment seems to be continually improving and consumers are once again excited about the housing market. Many have realised that housing prices are only going to increase from this point and they understand just how incredibly low the current interest rates are. Homeownership over the long term is viewed as an excellent way to provide stability, build up equity and formulate a solid financial plan for the future,” says Goslett.
Today’s first time buyers plan carefully, and are specific in what they require from a property. Goslett points out some factors that are becoming more and more important to a growing number of first time buyers:
Room to breathe
With a long term plan in mind, many first-time buyers are opting for slightly larger homes that fall within their budget so that they don’t have to move when their life stage changes. “It is recommended that a buyer purchase a home that will suit their needs for at least the next five to seven years if possible, as this will allow them to pay down their bond enough to make a profit when they sell the property. For this reason, even if a bigger family may not be an option immediately, it is still important that it is considered when looking at property. A versatile home will provide a sense of stability rather than become a burden when life changes,” says Goslett.
He notes that thanks to the vast amount of information at their fingertips, today’s first-time home buyers are a savvy bunch that understand the importance of buying a home that they can settle into for a longer period. With the recession bringing housing prices to a more affordable level, it has also become easier for first-time buyers to get into larger homes than they were in the past. However, today’s first-time buyers are realistic in terms of what they need and are more budget-conscious, looking for homes that will meet their future plans and allow for growth without putting them in financial danger.
There are also those first time buyers who would rather purchase a smaller sectional title unit that is easy to maintain. These buyers are often looking for a good investment property that they have the option of renting out for additional income instead of selling, if and when they need to move to a larger home. Location is an especially important factor to consider if this is part of the buyer’s future plan.
While location is a vital aspect for any property buyer to consider, Goslett says that first-time buyers are putting a lot of emphasis on a property’s location and its proximity to business hubs, shopping centres, schools and entertainment facilities.
“The myriad real estate information available has allowed first-time buyers the opportunity to see how vital location is in terms of return on investment over the long term. Location is one of the single most important factors because of how dramatically it can impact on a property’s potential for appreciation. In addition, location is also a consideration because of lifestyle offerings. If a buyer is planning to stay in a property for a long period of time, they want to be happy in the area,” says Goslett.
The right market
Irrespective of the features that today’s first-time buyers are looking for - the current market is perfect for them. Goslett says that affordable levels of house prices along with low interest rates have opened up opportunities in the market for first-time buyers who were previously unable to afford to purchase property. He notes that these factors make owning a property a much more attractive option than renting, especially considering the fact that the ever-growing rental demand is pushing rental prices up.
“If a buyer is in a financial position to purchase a home, why wouldn’t they?” he asks. “There seems to be no reason to continue paying rent, and paying off someone else’s bond, when market conditions are ideal for buying a first home,” Goslett concludes.