Youth Day & homeownership

Despite the innumerable challenges facing the youth today, the dream of being able to open the door to their first home is not just a fantasy; it can be an achievable goal. This guide aims to demystify the path to property ownership and provide actionable insights.

Q1: What are the major financial challenges the youth of South Africa face today?

• Education and Skills Gaps: Many schools, particularly in underserved communities, lack the essential resources to adequately prepare learners for the dynamic demands of the job market or further education. This often leads to a mismatch between available skills and industry needs.
  
  
• High Youth Unemployment: A significant lack of work experience, coupled with a persistently stagnant economy, makes job access incredibly difficult for young South Africans. Shockingly, Stats SA reports that approximately 60% of South African young people aged 15 to 24 are actively seeking work but are unable to find employment. This highlights a critical need for innovative job creation strategies.
  
  
• Limited Financial Literacy: A concerning number of young people lack fundamental knowledge in budgeting, saving, and comprehensive financial planning. This deficit can lead to poor financial decisions and long-term instability.
  
  
• Barriers to Saving: Low income levels, significant family support obligations, and often, limited or no exposure to effective saving habits, collectively prevent wealth accumulation. This cycle can be incredibly difficult to break without targeted intervention and education.
  
  
• Digital Divide: Unequal access to the internet and essential technology, particularly in rural areas, severely limits learning opportunities, access to information, and job-seeking prospects. Bridging this divide is crucial for equitable development.
  
  
• Entrepreneurship Challenges: Aspiring young entrepreneurs frequently struggle to access vital funding, comprehensive training, and supportive networks. This impedes their ability to innovate, create jobs, and contribute to economic growth.
  
  

Q2: How can we stimulate a focus on a savings culture and mindset among young South Africans?

Creating a savings culture is paramount for empowering our youth. It requires a multi-faceted approach:

• Early, Practical Financial Education: This must begin in schools, integrated into the curriculum from an early age, and extend through engaging community and workplace programmes. Learning by doing is key.
  
  
• Focus on Everyday Realities: Financial literacy programmes must be relevant and practical, addressing daily realities such as effective budgeting, setting realistic financial goals, and understanding how to resist "lifestyle inflation" – the tendency to increase spending as income rises. Making savings relatable, like creating a "rainy-day fund" or saving for data, school fees, or even small business goals, helps to shift mindsets from abstract concepts to tangible benefits.
  
  
• Accessible Tools: The availability of user-friendly digital savings platforms, low-cost banking products, and intuitive mobile applications can make saving significantly easier and more visible, fostering a sense of control and progress.
  
  
• Reward-Based Savings: Innovative approaches, such as offering airtime, small cash incentives, or loyalty points for consistent deposits, can powerfully encourage regular saving habits, especially for those new to the concept.
  
  
• Shift the Narrative Culturally: We must collectively shift the perception that saving is solely for the wealthy. Instead, we need to celebrate it as a fundamental tool for empowerment, resilience, and achieving personal freedom. Role models, influential social media personalities, and respected community leaders can play a vital role in normalising saving and celebrating financial discipline within our communities.
  
  

Q3: Do you believe that the youth have the same focus on homeownership as their parents did?

While the aspiration for homeownership remains strong, many young people perceive it as harder to achieve than previous generations. According to global market research company Ipsos, in their IPSOS Housing Monitor 2025:

• An overwhelming 92% of South Africans agree that everyone has a right to own their own home, which is significantly higher than the global average of 78%. This places South Africa among the top countries globally in terms of home ownership aspirations, showcasing the enduring desire for security and stability.
  
  
• Generational Comparison: A striking 72% of South Africans say it's harder for people their age to buy or rent a home to settle down in than it was for their parents' generation. This figure is notably higher than the global average of 67%, reflecting the unique economic pressures faced by South African youth.
  
  

For more insights, you can read their article: The Youth and Property Purchases.

Q4: What are the challenges young people face regarding home ownership?

• Low Income Levels: Many young people earn below the minimum threshold required to qualify for a home loan, making the initial step of homeownership seem unattainable.
  
  
• Poor Credit History: Limited or non-existent credit records, or even poor credit scores due to past financial missteps, make it significantly harder to secure favourable loan terms or even qualify for a loan at all.
  
  
• Rising Living Costs: The ever-increasing daily expenses such as transport, food, and rent leave very little disposable income for saving for a crucial home deposit.
  
  
• High Property Prices: Urban housing areas, which are often where job opportunities are concentrated, frequently have property prices that are prohibitively expensive for first-time buyers.
  
  
• Lack of Financial Literacy: Many do not fully comprehend the significant, long-term financial commitment and responsibilities that come with homeownership, which can lead to unforeseen challenges down the line.
  
  

Here are some possible counteracts:

• Low Income Levels – What You Can Do: Consider government subsidy options like FLISP to help boost your home loan eligibility. Explore joint bond applications with a partner or family member to combine incomes, or start with more affordable housing options in emerging suburbs.
  
  
• Poor Credit History – What You Can Do: Build credit by responsibly managing small accounts like retail store cards. Check your credit score regularly through agencies like TransUnion or Experian, and work to resolve negative listings. Consistently paying off debts on time will help you improve your credit profile over time.
  
  
• Rising Living Costs – What You Can Do: Create a monthly budget that includes a fixed savings goal, even if it’s a small amount. Use tax-free savings accounts or low-fee digital tools to build up your deposit. Cut down on non-essential expenses and redirect those savings into your future home fund.
  
  
• High Property Prices – What You Can Do: Consider starting with a smaller property or one located just outside major job hubs. Look into properties under R1 million to avoid transfer duty, or explore buy-to-let options in more affordable areas to build equity.
  
  
• Lack of Financial Literacy – What You Can Do: Attend free workshops or webinars from trusted property and finance platforms. Use tools like bond and affordability calculators to understand your limits. Speak to a bond originator — they can help you compare home loan offers and guide you through the process, often at no cost. There are also several resources on YouTube that you can learn from.
  
  

Q5: Is homeownership among the youth a priority aspiration?

While many young people genuinely desire to own a home, for a significant number, it remains an unrealistic aspiration given current economic realities.

However, encouraging data from Lightstone Information Solutions research reveals fascinating trends regarding young South African home buyers:

• Most buyers aged 35 years and younger are new entrants to the property market – an impressive 70% to 71% of first-time buyers fall within this dynamic age group. This indicates a strong underlying drive to enter the property market.
  
  
• South Africans aged 35 and younger are buying fewer, but more expensive houses. This trend suggests a strategic approach to investment, perhaps indicating a desire for properties with better long-term value.
  
  
• In 2023, of buyers under the age of 35, 36% paid R1-million to R3-million for their homes, compared to just 29% in 2018. Conversely, sales of houses priced between R250,000 and R500,000 fell from 34% in 2018 to 25% in 2023. This shift illustrates a growing segment of young buyers aiming for higher-value properties, perhaps due to evolving market dynamics or a focus on future equity.
  
  

Q6: Do you believe the youth should stay at the family home for as long as possible, while saving for a goal, such as property ownership?

For many young people living in township homes without stable employment, staying at the family home is often not a choice, but a necessity, with their limited income frequently going towards supporting immediate and extended family members.

However, for those from relatively well-off families, it can indeed be a strategic way for young people to save a substantial amount towards property ownership or other significant financial goals. This decision requires careful consideration of family dynamics and financial circumstances.

Q7: What questions do the youth need to consider about achieving their financial goals, and what measures do they need to take to reach them?

Regarding home ownership, it’s crucial to understand the long-term financial commitment and responsibilities associated with buying a home. It’s essential to weigh the benefits of buying a home against other financial priorities, such as investing in education or starting a business.

Young people need to understand that they require a stable income to consistently save for a deposit and make ongoing home loan repayments. Furthermore, a solid credit score is paramount to securing a favourable interest rate, which can save them thousands over the life of the loan.

Q8: What are the basic steps the youth should take now for future financial health?

The earlier young people understand how to manage money effectively, the better equipped they will be to make smart, confident financial decisions throughout their lives. Financial empowerment starts with practical steps:

• Create a Detailed Budget and Savings Plan: This is the foundation of financial health. Knowing where your money goes and where you can save is the first step.
  
  
• Set Achievable Savings Goals and Milestones: Break down large goals into smaller, manageable steps. Celebrate each milestone to stay motivated.
  
  
• Automate Savings Transfers to a Dedicated Account: "Pay yourself first." Set up automatic transfers from your primary account to a separate savings account immediately after you get paid. This ensures consistency and reduces the temptation to spend.
  
  
• Cut Unnecessary Expenses: Review your spending habits critically. Identify and eliminate non-essential expenses that hinder your savings progress. Small cuts can add up significantly over time.
  
  
• Increase Income Through Side Hustles or Freelance Work: Explore opportunities to earn extra money outside of your primary employment. The gig economy offers numerous avenues for additional income.
  
  
• Invest Any Windfalls: Whether it's a tax repayment, a work bonus, or an inheritance, resist the urge to spend windfalls. Instead, invest them wisely to accelerate your financial growth.
  
  
• Explore Government Assistance and Incentive Initiatives: Research programmes designed to support first-time homebuyers or promote saving. South Africa often has schemes that can provide a valuable boost.
  
  
• Monitor and Maintain a Good Credit Score: A healthy credit score is vital for securing favourable interest rates on loans, including home loans. Regularly check your credit report for accuracy and work to improve your score.
  
  
• Consider Low-Risk Investment Options: While saving is crucial, explore low-risk investment avenues that may offer higher returns than traditional savings accounts or term deposits. Consult with a financial advisor to understand suitable options.
  
  

Q9: What lifestyle factors should the youth consider when buying property?

Young people should meticulously examine their lifestyle preferences before committing to a property purchase. It may be a wise long-term decision to pay a little more for a home that perfectly suits their needs in terms of location, size, and proximity to essential amenities, rather than opting for a cheaper property that compromises on these crucial benefits. Buying a home is a significant investment, and aligning it with your lifestyle is key to long-term satisfaction.

Lifestyle factors to consider when choosing a new home include:

• Interior Space: Assess the space needed for current living requirements and anticipate future growth, such as establishing a home office for remote work, accommodating a growing family, or simply having room for hobbies.
  
  
• Outdoor Space: Consider the importance of a garden or yard for pets, outdoor activities, entertaining, or simply enjoying nature.
  
  
• Proximity to Work, Friends, and Family: Evaluate how the location impacts your daily commute and your ability to maintain social connections and family ties.
  
  
• Access to Major Roads: Good road access can significantly reduce commuting time and associated transport costs, improving your quality of life.
  
  
• Amenities: The availability of nearby gyms, parks, shopping centres, schools, and healthcare facilities can greatly enhance convenience and daily living.
  
  
• Safety and Crime Statistics: Thoroughly research the safety of the area. Accessing local crime statistics and speaking to residents can provide valuable insights into neighbourhood safety.
  
  
• Plans for Future Developments: Investigate any planned developments in the neighbourhood, such as new infrastructure, commercial spaces, or housing projects, as these can significantly affect property values and the overall living environment.
  
  

It’s also vitally important to check market trends and resale values in any prospective area to ensure the investment aligns with any long-term financial goals. Housing prices have seen fluctuations in many South African suburbs, sometimes due to concerning factors such as deteriorating infrastructure, pervasive potholes, persistent load shedding, and critical water cuts. Therefore, it is absolutely essential for young people to do their homework thoroughly and make an informed decision that secures their future.