The Lifetime Benefits of Buying Young

Introduction

Whether you’re a home buyer or a property investor, there is exceptional value on offer now in almost every price bracket in SA – and thankfully for the property market, these opportunities are also accessible to an unusually high number of purchasers because of the low-interest rates.

Property as an Asset

That’s the word from Berry Everitt, CEO of the Chas Everitt International property group, who notes: “Price growth has been outpaced by salary growth for the past few years, which has helped to make home ownership more affordable for many working South Africans, but it is the low rates that have really tipped the scale and are driving the very high number of first-time buyers at the moment – as well as much higher-then-expected levels of sales activity among repeat buyers.

In addition, he says, the message is now definitely getting through to younger buyers that sooner is always better than later when buying real estate because whatever the interest rate is, steadily rising home prices will always mean that you need a bigger home loan this year than you would have needed last year to buy the same property – and a higher salary to qualify for that loan.

“This is evident from the fact that the average age of first-time buyers in SA has been dropping rapidly this year, from around 37 before lockdown in March to around 34 currently as more and more young people realise that paying off your first home during your 20s and 30s instead of in your 40s and 50s can make a huge difference to your financial future and that of your family.

“The sooner you start gaining equity in your property by paying off your home loan, the sooner you will gain an asset that you can sell, rent out or use as collateral to borrow money so that you can afford tertiary education for your children, for example, or invest in further rental properties that will boost your income in retirement.”

Alternatively, says Everitt, buying young could just mean that you are “bond free” by the time you get to your mid-40s, and have financial freedom to do whatever you please, whether that is saving for retirement, or educating children, or travelling, or supporting your parents.

Source: Photo by Ralph (Ravi) Kayden on Unsplash

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