Three quarters of American homebuyers use the internet frequently to shop for homes. Just under half go there first to look for a home. And again, just under half say they first saw the home they ultimately bought, online. Observations of South African buying habits suggest we follow in their footsteps, though no comparable survey has been undertaken locally.
Some of the most interesting research undertaken by the National Association of Realtors (NAR) in the US is its annual survey of homebuyers and sellers, which reveals the biggest current trends in real estate, and especially how buyers go about finding their new homes.
The recently-released 2015 Profile of Home Buyers and Sellers shows, for example, that in the US first-time homebuyers now make up just 32% of the market – despite the fact that interest rates in the US have been at record lows for several years – and that this percentage is still on a declining trend.
By contrast, first-time buyers still make up between 40% and 50% of (total bond applicants)* in the market in SA, depending on whose statistics you read, in spite of slow economic growth, high unemployment, higher interest rates than in the US and the tight lending criteria that have prevailed for the last few years.
“This discrepancy is probably largely due to the fact that such a large percentage of the SA population is under 35,” says Jan Davel, MD of the RealNet estate agency group, “and that so many of these young people still aspire to buy a home of their own.
“This is a major positive for our market because it means that we still have a relatively large number of fresh entrants to our market every year and that it continues to grow in numbers of home sales – even if price growth is sometimes slow.”
Meanwhile, when it comes to the home search process, the NAR survey shows that:
- 77% of buyers now use the internet frequently during the search process (compared to only 42% in 2003), and 42% go there first when they start looking for a home;
- Even though mobile and independent web searches are growing, 68% of buyers still seek information and help from estate agents, although only 14% consulted an agent as their first step in the home search process;
- More buyers are using apps and accessing online listings via a smart device (phone or tablet), with 41% of buyers stating they used this method in 2015; and
- 13% of those who eventually buy spend a lot of time online researching the actual home purchase process before even looking at listings.
“Similar research results are not available for the SA market,” Davel says, “but our own observations suggest that this is pretty much how local buyers are behaving too, and that sellers increasingly need to ensure that their agents are using the best online (and mobile-friendly) marketing platforms – and using them well.”
What figures are available for online home viewing in South Africa come from the dominance of the market by two property portals, property24.com, owned by the Naspers media conglomerate, and privateproperty.co.za, owned by an international equity fund of which the majority shareholder is One Africa Media.
Hype Stat, which does website analysis and statistics, cites 3,065,220 monthly unique visits and 102,174 daily unique visitors to property24.com. It does not have site stats for privateproperty.co.za. Further, property24.com claims over 300 000 property listings for sale and rent.
Privateproperty.co.za cites over 1 million visitors monthly and carries over 180 000 property listings.
It is interesting to note that, says Davel, that in the US, 44% of buyers in the NAR survey said they first saw the home that they ultimately bought online, while only 33% found the home they bought through an agent.
“This is absolutely not to say that most buyers bought their homes through the internet, or that we can expect that to start happening. The typical scenario would be that a prospective buyer sees the home on the internet, and then contacts the agent to arrange to see it and possibly buy it.
“In fact, the NAR survey also showed that 88% of those who used the internet to search for listings they liked eventually purchased their home through an agent.
“It does, however, underline the rapidly increasing importance of online marketing and the agent’s ability to respond to online enquiries.”
*Editor’s note: According to FNB’s Estate Agents Survey, first time home buyers accounted for 26% of total home buyers in the fourth quarter of 2015. Bond originator ooba cites a figure of 40%, but that is of bond applications, not all transactions. A similar figure is quoted by bond originator BetterLife, of 46%, of total applications for bonds. Broken down the percentage is higher in the affordable market says BetterLife, at 61% for first time home buyers seeking bonds, that is for homes less than R750 000. In the “normal” market, that is above R750 000, first time buyers account for 29% of all bond applicants.