Contact Us
Thursday Sep 01, 2011

Young property buyers 'more prominent'

Young buyers have increased in prominence since 2008 but have not reached the same high percentages of the boom years according to John Loos, property analyst at FNB Home Loans.

Loos said that trends in buyer age groups could be an important indicator of the economic and interest rate environment.

He noted that this group stayed out of the market in greater numbers than their older counterparts, and entered the market at a more rapid rate off a low base once conditions turned for the better.

Typically, the younger buyers in their 20s and even many in their 30s had more flexibility, often having not yet established a family and thus possessed more basic residential needs.

Loos said that they could often opt to remain in their parents' home for longer, or alternatively stay in a rented home in tough times. Young aspirant buyers have accumulated fewer savings, and were thus arguably more sensitive to deposit requirements by banks which come and go at various points in the cycle, and were also more sensitive to house price fluctuations.

Thus, a higher degree of cyclicality in first time or in younger age group residential buying in general was evident according to Loos.

He said in the second quarter of 2011, the sample of agents taking part in the FNB Estate Agent Survey estimated that 25% of buyers were first time buyers, up from 22% in the previous quarter and now well higher than the low of 12% reached in the third quarter of 2008 as the recession hit.

Using Deeds data for property purchases by individuals, the evidence also existed to show that since early-2010 the younger age groups had been playing a more prominent role in supporting home buying demand, Loos continued. From a low of 15.1% as at the third quarter of 2009, the four-quarter moving average percentage of ¬ďage 30 and below" buyers rose to 16.9% as at the second quarter of 2010. Simultaneously, the 31-40-year age group's percentage rose from 29.6% to 31.1% of total buying.

Loos said that these figures definitely showed an improvement since the 2008 recession and the peak in interest rates. The percentages of young buyers would also suggest an environment still far more benign than early last decade, where the 20 and under age group reached a 20.6% peak in 2001.

I-Net Bridge


Previous Articles *

Search News

Property Searches:

Browse Property For Sale

© 2020 Independent Online Property Joint Venture (Pty) Ltd. All rights reserved.
Reliance on any information this site contains is at your own risk. Please read our Terms and Conditions of Use and Privacy Policy.