Young Buyers Urged to Get into Property Market - 08-22-08

August 22 - With the difficult conditions in today's property market in South Africa, the furthest thing from any young person's mind would be to go in and buy a home. In fact, many young couples have put off the idea of buying their dream home until such time as interest rates stabilize and the economy improves enough for them to commit to long term home loans.

However, property experts are advising that owning that first home may not be such as far off dream as believed. Young buyers are told that while lending terms are tough, they are not impossible. Balanced with the fact that it is a highly attractive buyer's property market out there, the chances are that young people could make that first purchase if they tried hard enough.

Property experts say that buyers should first of all lower their expectations and not despair if they don't own a home by the age of 21. The CEO of Realty1 International Property Group, Mike Bester said: "The average age of the first time buyer has reduced substantially over the past twenty years. In the eighties, very few people could afford to buy property before the age of thirty or older. These days, young graduates in their first job expect to be able to buy their own homes - and they are particular about the standard they want too."

Bester suggests that first time buyers drop their expectations and enter the property market at a lower level. To do this, they would need to do their homework to see how much they need to save for a deposit by visiting banks or mortgage originators.

Once they have a clear picture of what is expected of them, buyers should start saving towards that deposit by putting away each month the difference between a potential monthly bond and the current rental rate. "Not only will this be an excellent basis for a deposit," explained Bester, "but it will also teach you the financial discipline of making that monthly payment. The average buyer these days needs a 10% to 20% deposit on the price of the property, as well as enough to cover transfer fees for properties over R500,000, attorney's fees and bond registration fees."