Single? Under 35? Not earning your dream salary yet, but dreaming of owning property? You could make it happen faster than you might think.
Be proactive about becoming a first-time buyer and find out what’s within reach with these five, clever tips:
Can’t afford it? Ask for help
First-time buyers with a gross monthly household income of between R3 501 and R22 000 could qualify for the government’s Help Me Buy a Home programme (formerly FLISP). Lightstone data for June 2023 shows more young buyers opting for properties as single owners. In 2012, 69% of younger buyers were single owners, whereas this figure has now increased to just under 75%.
Be savvy about what you buy
Buying a home of less than R1.1 million, which is the transfer duty threshold, will mean a considerable saving for a first-time buyer. Lightstone reports that 44% of sales to buyers under the age of 35 were in the R500 000 to R1 million price range.
Another option is to buy in a new development where transfer duty does not apply. The big banks in South Africa offer a range of home loan products that include loans of as much as 110% for young professionals under the age of 30.
Collective saving schemes, ‘stokvels’, have become an increasingly popular way to buy property. Some of the big banks, like FNB and ABSA, have launched a collective buying home loan scheme which allows up to 12 people to buy property together. Each person contributes towards the monthly repayments.
You don’t have to put a ring on it to own property with your partner! Joint bond ownership allows at least two parties to apply for a bond together. It could be a partner, a friend, or a family member. While there are many benefits – including shared costs and other responsibilities – it is important to be aware of the risks as well. If one of the bondholders pulls out, the other party will be responsible for repaying the bond.
Let the professionals do the work
Buying property is an exciting investment, regardless of whether you are a first-time buyer looking to get a foot on the property ladder, or a seasoned investor who wants to expand your portfolio. Get a bond originator to talk to various banks for you in order to look for the best option. The best part, is that this service is free!