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First-time homebuyers show consumer power thanks to low interest rates

Lightstone reports an annual inflation rate of 4.6% for home prices at the end of April 2021.

  • The impact of lower interest rates is evident in the age group of 31-40, who are most likely to buy a home for the first time.
  • Since October last year, the average purchase price for new homes has been around R1 million.
  • Young buyers are looking for properties with a “modern and open plan that allows them to move in immediately.”

The average purchase price of first homes since October last year has been around R1 million, and since October last year, first home buyers have remained a major driver of the residential real estate market, compared to the last few years. It is a big rise. Better bond.

Two years ago, the average spending of first homebuyers was less than Rs 900,000. However, since the beginning of this year, the average home purchase price of the first homebuyers applying for bonds to BetterBond has risen by 15%.

Western Cape is just over 1.4 million rand, the highest average purchase price for first-time buyers. Other areas where first-home buyers are looking for properties priced over R1 million include Greater Pretoria, Johannesburg, Northwest, KwaZulu Natal, Northern Cape, Nelsproit and Mpumalanga.

According to Brynn Janeke, CEO of Easy Real Estate, buyers who may have previously rented are looking for “ready-to-go, modern, open-plan” apartments and townhouses. Many of these buyers start with bands under R $ 2.5 million.

The average age of first-time homebuyers signing up for BetterBond is about 36 years. Between the ages of 20 and 30, the average homebuyer’s average purchase price has risen by almost 20%, generally at around R1.1. a million.

Coetzee believes that low interest rates have made it easier to access real estate. As a result of the fifth consecutive reduction in repo rates in 2020, the prime rate was 7%, the lowest in 55 years.

The impact of lower interest rates is also evident in the 31-40 age group. This is usually the case for most first home buyers in this age group. The average purchase price for these buyers is around Real 1.3 million, up 13.4% over the last 12 months.

The latest Lightstone Residential Property Index has also found a positive impact of favorable interest rates across all market segments. The annual inflation rate for home prices at the end of April 2021 was 4.6%. The current annual inflation rate is 4.56%.

First-time homebuyers show consumer power thanks to low interest rates

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