The most recent FNB Property Barometer indicates a big upturn in first time homebuyers – an increase of 35 per cent since 2008, says Morne Prinsloo, director for Mortgage Plus Bond Originators.

In 2008 first time home buyers comprised 17% of the total homebuyers and in 2011 they comprised 23%.

Prinsloo said that this shows:

1. that the banks are easing up on their lending criteria – even to the extent of three of the major banks now granting 100% loans to qualified applicants, with one bank granting up to R 2 700 000.

“This,” he said, “may or may not be in response to repeated calls from estate agents to review the criteria but, whatever its cause, we are grateful and see it as a first step towards “normalisation” of the market;

2. A revival in consumer confidence in the property market – it is noteworthy, said Prinsloo, that many first time homebuyers do not have to buy: they can continue to rent or live with friends and family. The fact that they choose to do so indicates an increasingly positive mindset regarding property in SA today and this is to be welcomed.

3. The raising of the transfer duty tax exemption to homes sold for up to R 600 000, has been another boost to first time home buying

4. First time homebuyers are encouraged by the 35-year low in interest rates

The benefits of home ownership, said Prinsloo, have been so well promoted “by Mortgage Plus Bond Originators” that we assume they will be widely appreciated. However, this is not always the case among those with a “rent-forever” outlook. It is, he said, therefore encouraging that so many people at the lower end of the housing market realise that owning a home is still the most convenient way to secure growing assets, a stable family-oriented position in society and the opportunity to “personalise” one’s domestic surroundings.

“Home ownership is good for economies and the fact that South Africa’s first time homebuyers are on the increase is good news. It could be that this emerging middle class will keep South Africa on track despite disruptive elements working to break down existing social structures and change existing economic policies.”

For further information contact Morne Prinsloo on 011 327 4489 or email morne@mortgagepluscc.co.za

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The slowdown in the residential property price growth is providing first time buyers with an opportunity to enter the property market.

According to Rhys Dyer, the average first time buyer’s purchase price has seen consistent growth in the past quarter.

This, he says is due to the low interest rates combined with the ongoing easing in lending conditions, especially in regard to deposit requirements.

“Higher levels of activity among first time buyers are generally a positive indicator for the housing market,” says Dyer.

The price index, recorded a negative year-on-year price growth of 3.4 percent to R 821 579 in July 2011 from R 850 763 in July 2010.

However, the July first-time buyer’s purchase price figures show a 3 percent year-on-year growth to R 609 417.

Dyer says 49.3 percent of home loan applications finalised  from January to July 2011 are for first time homebuyers.  This is up 2.3 percent from the same period last year.

Sean McCauley, Rawson Properties director says according to the FNB Property Barometer, the number of first time home buyers has increased.

He says first time buyers comprise 25 percent of residential property buyers and this is the highest level achieved for first time buyers for at least five years.

“In 2008, a boom time in property, only 15 percent of buyers were first timers, therefore the growth has been in the region of 66 percent,” says McCauley.

He explains that the increase in the number of first time buyers has probably contributed to the average house price moving upwards, albeit slowly.

“It has now reached the point where at R803 751 the national average house price has broken through the R800 000 barrier for the first time.”

An increase in the number of loans being granted by the banks and the raising of the transfer duty tax exemption to homes sold for up to R600 000, had undoubtedly been a prime cause in the rise of first time buyers, he says.

“The low interest rates (the lowest in 35 years) and the fact that home prices are now very well priced have a positive effect on the residential property market.”

He notes that the rise in first time home buyers appears to be closely linked to the growth of the middle class.

“We find that property is still seen by the middle class homeowners in South Africa as the safest and most desirable asset class,” he adds.

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