Older home buyers have greater buying power than their younger counterparts
Kgaugelo Masweneng | 2017-06-05 16:54:54.0
Young couple buying a house.
Image by: iStock/ michaeljung
Home buyers over the age of 50 are currently paying about twice as much more for their homes on average than buyers under the age of 30‚ according to the latest property market statistics from BetterLife Home Loans.
However‚ they are only paying about 30% more on their monthly bond repayments.
The BetterLife figures show that the average home purchase price paid by buyers aged between 20 and 30 over the past 12 months was R772‚000‚ while that paid by buyers aged 50 to 60 was R1‚337‚000 – and that paid by buyers over 60 was R1‚687‚000..
“However‚ there is a much narrower gap when it comes to the home loans obtained by buyers in these different age groups‚” said Shaun Rademeyer‚ CEO of BetterLife Home Loans.
“Our statistics show that buyers aged 20 to 30 are currently paying an average deposit of around R90‚000‚ which puts their average bond at R682‚000 and their average monthly repayment at just over R6‚800.
Most buyers over 50 are repeat buyers‚ he says‚ and these figures clearly illustrate the greater buying power that results from building up equity in a property which can then be used as a deposit to acquire a more expensive property‚ without raising one’s monthly home loan repayment too much.
“Our stats also reflect this‚ in the rising percentages of home loans that are being granted in higher-price categories. In the 12 months to end-May‚ 38.7% of all homes loans granted were for more than R1m‚ compared to 36.5% in the previous 12 months.”
At the same time‚ Rademeyer says‚ younger buyers are clearly starting to struggle now to get on to the first rung of the property ladder.
Banks are becoming increasingly cautious when it comes to approving new loans and are applying very strict credit qualification criteria‚ which results in what may look like‚ but is not‚ a decline in demand‚
“The percentage of home loan applications being made by first-time buyers has actually increased over the past 12 months from 46.1% to 47.5%.
“On the other hand‚ our approval ratio is running at 75% currently‚ so with our assistance‚ buyers really have a very good chance of their application being approved and of being able to proceed with their home purchase‚” said Rademeyer.