This is according to John Loos, household sector strategist at FNB, quoting results from the four quarterly FNB Estate Agent Surveys in 2016.
“The sample of estate agents surveyed through 2016 estimated first-time buyers to make up 20% of total home buying, which represents the second year of decline in this percentage from a 26.5% high in 2014 and 24.25% in 2015,” said Loos, noting that Cape Town shared the lowest estimated first-time buyer percentage of 13%. “By comparison, the major Gauteng regions of greater Joburg and Tshwane return far higher estimates of 22% and 24%, respectively.”
The situation in Cape Town is largely due to significantly faster house price growth than the rest of the country, posting house price inflation of more than 10% last year, compared with Gauteng’s 4% to 6% growth and Ethekwini’s 7%.
“[The Cape] has a strong net inward migration of repeat home buyers from other regions too,” said Loos. “It is possible that affordability challenges in that region are ‘crowding out’ first-time buyers to a greater extent than in Gauteng, a key challenge for Cape Town should it wish to retain its younger skills base within that region.”
According to the cumulative results of the 2016 estate agents surveys, there was a decline in the estimated percentage of single home buyers (compared with couples), from 19.5% in 2014 and 17.5% in 2015, to 16.7% in 2016.
“Since 2007 the percentage of individual property buyers below the age of 40, the age cohort from which many first-time buyers come, has dropped from 52.59% of total buyers to 42.24% by 2016,” said Loos. “The 2016 estimate represented a further decline on the 44.22% for 2015.”