Young people are daily being urged to become homeowners and get on to the “property ladder” but it also needs to be said that most first-time buyers will probably have to take a much closer look at smaller homes, cheaper commutes and properties in need of renovation if they are to realise this goal.
That’s the word from Berry Everitt, MD of the Chas Everitt International property group, who says that while affordability is of course the major concern of all those entering the market for the first time, there is often quite a serious disconnect between this concern and the size of home they would like to buy.
“However, rather than becoming discouraged, they need to understand that bigger isn’t necessarily better these days, and not only when considering the purchase price or monthly bond repayments.
“A smaller freehold home or a townhouse also means lower property taxes, maintenance costs, insurance premiums and electricity and water bills - and being able to enjoy a better lifestyle at the same time as becoming a homeowner.”
Writing in the Property Signposts newsletter, he also says that young buyers should also not rush into a purchase. “Research shows that the average first-time buyer looks at between 10 and 20 homes before buying, but it can really pay to be patient and view many more than that, and especially homes that have been listed for more than 90 days, because that is typically when anxious sellers start to reduce their asking prices.
For most first-time buyers, Everitt says, proximity to their workplace is the second major item on their list of preferences, thanks to rising fuel and transport costs and frustration at increasing traffic congestion.
“The trouble with this, though, is that homes close to office nodes often cost more precisely because of the added value of reduced transportation costs and commuting times.
“However, smart buyers are finding that they can enjoy the best of both worlds (lower home prices and less costly and stressful commutes) if they pick areas that offer reliable and relatively low-cost public transport to work. This is evident from flourishing sales in areas close to the Gautrain stations and along the MyCiTi rapid bus transit route in Cape Town.”
In addition, he says, first-time buyers might want to rethink their preference for homes in sparkling, “move-in” condition and take a closer look at the fixer-upper option. “In the past, this was a common choice for young people who wanted to break into the property market, and it is often still a good way to reconcile affordability concerns and location preferences – that is, to buy cheaply in a good area.
“Even homes that need a basic facelift - paint, new carpeting, modern light fittings and some landscaping - can come with big savings, especially if the owners are keen sellers. And homes that require bigger upgrades – such as rewiring, replumbing and reroofing - will usually cost even less, although buyers do need to proceed with great caution here and get a professional assessment of the work to be done and the probable cost before making any offer to purchase.”