- A new survey shows many South Africans keen on buying property are overestimating what their income can buy them.
- Most respondents don't own the property where they live, and a large percentage still live at home with a parent or caregiver - with 13% of this group aged over 40.
- A property expert foresees "agile" products will enter the market in response to the increased need for flexibility and affordability among these potential buyers.
Most people interested in buying a property understand how having a bond works, but for many, there's a misconception about what they can realistically buy, a recent survey suggests.
The survey, by urban property development firm Blok, polled 1 470 respondents, mostly based in the Western Cape (55%), followed by Gauteng (29%) and KwaZulu-Natal (12%).
About 34% of respondents fell within the 26 - 30 years age group, followed by the 30 - 36 age bracket, therefore, largely millennials. Gen Y-ers, meanwhile, make up 27% of the South African population, translating into a buying power of around 14 million people, says Jacques van Embden, managing director at Blok.
The largest group of respondents (57%) earned a gross monthly salary of between R15 000 and R20 000. When it came to their maximum price threshold, respondents were under no illusions as to what they could afford, with 581 of the 1 470 participants stating that they could only afford a property that was R500 000 or less.
However, when it came to the size of property, the survey revealed consumers to be uncertain of what their income could get them. Almost half of respondents sought a two-bedroom property, as opposed to a studio or one-bedroom apartment.
Of those surveyed, only 20% owned the property where they lived; 26% indicated that they rented together with friends or a partner; while the largest group (35%) still lived at home with their parents or caregiver. The vast majority of respondents who lived at home were between the ages of 26 and 36, while 13% were over the age of 40.
"This may be a result of the economic landscape, and the financial pressure faced by today's consumer - they're living at home for longer periods of time, as they simply cannot afford to live independently," says Van Embden.
He foresees more "agile" products will enter the market in response to the increased need for flexibility and affordability among potential property buyers. When it comes to what is most important to buyers when choosing a property, the survey showed that size was of least importance, with "location" cited as the most critical deciding factor, and "price" being the second most important consideration. Almost half (47%) of respondents admitted that they would rather downscale in apartment size, if it meant an improved quality of life, especially if the development also had a fitness studio and roof deck with a pool.