First-time home buyers on South Africa’s coast have been choosing the Western Cape as their preferred destination since 2014 and this trend spiked in 2021 as the market began to recover.
According to Mike Lehabe, Head of Financial Services at Lightstone, favourable interest rates, coupled with remote office working and semigration, are becoming a more pronounced feature of the residential property market, and the province’s reputation for better-run municipalities is also contributing to the pull of the region.
First-time buyers of inland properties favoured Gauteng, South Africa’s commercial heartland. “Again, it is worth noting the spike in 2021 as first-time buyers took advantage of the historically favourable interest rates and the market adjusted for 2020 when hard lockdowns brought house sales to a trickle for a while”, he says.
Lightstone says the number of first-time buyers has been edging upwards during the past four years as a percentage of transfers following years of consistency in the market with the historically low interest rates certainly spurring buyers into the market who remained steady at 32% to 33% between 2014 and 2018, and edged up to 34% in 2019, before jumping to 37% in 2020 and 2021.
However, the rise in first-time buyers in percentage terms must be seen against the total numbers of transfers, which drift downwards from 2015 until 2019 – and a sharp drop in 2020 as the hard lockdown took a toll on the market. The 2021 jump in numbers, in part, reflects the pent-up demand playing out as lockdown conditions eased.
Repeat buyers have reduced in both percentage terms and actual numbers. In 2015, some 270 189 transfers were recorded, of which 181 026 (67%) were repeat buys. In 2019, repeat buyers had slipped to 162 688 (66%) of total transfers.
The volume of bonded transfers for both first-time and repeat buyers have increased since 2015, with a slight decrease in 2020. First-time buyers are more likely to bond than repeat buyers, with the percentage of bonded transfers increasing sharply from 2017 and peaking at 72% in 2021.