Do not delay becoming home owners.

ALEXANDER SWART ADVICE TO MILLENNIALS: DO NOT DELAY BECOMING HOME OWNERS.

It is regrettable but true, that the number of young couples in South Africa today who are coming to believe that they will never own their own homes is increasing, says Rowan Alexander, Director of Alexander Swart Property, the fast growing Western Cape estate agents.

In this respect, he says, South Africa’s millennials (as well as many who are well into middle age) are following the trend seen in the UK and Europe.

“A recent UK study,  has shown that nine out of ten people in Britain below the age of 35 now accept that they will never own their own home. A survey in Germany has shown that 70% of all urban residents are these days tenants. In the northern suburbs of Cape Town, where Alexander Swart is focused, today approximately 75% of homes are owner occupied and we are witnessing a tendency for potential first time buyers to wait indefinitely before taking the plunge.”

Why has this come about? The first and obvious answer, says Alexander, is that salaries are no longer rising in the satisfactory way they did five to fifteen years ago. Equally relevant, however, is the fact that land for development in Greater Cape Town is becoming in short supply. This in turn makes it more expensive and more likely to be subdivided so that multiple-unit homes can be built on it. These multiple units, says Alexander, meet a demand but they also tend to raise the average price although usually less expensive than single dwellings on their own plots.

“Talking recently to a removals trucking company that helped a Free State family transfer south, I learned that they are doing six such moves every month and –Free Staters are not nearly as likely to move as Gautengers. I estimate that 20-25% of all our buyers today are from upcountry.”

Those millenials and others now holding back on home buying, says Alexander, are locked into expensive lifestyles with both partners driving new cars, holidaying away from home at pricy destinations and entertaining regularly. As a result they are unable to save sufficiently towards a home purchase.

“At Alexander Swart we have a self appointed mission to convince young people it is time to change their attitude and to make every effort to get a foot on the property owning ladder, even if this means buying a less attractive, smaller home than they had set their sights on. Those who take our advice often find that here in Cape Town, as property prices rise ahead of inflation, their homes rapidly increase in value and this enables them to upgrade or become second property owners within five to eight years.

“Those who delay a buy decision, however, inevitably find it harder each year to “get there” and remain tenants without a nest egg to support them in their old age. Property owning is the surest way to build up one’s assets if one is a salary earner or in a business which cannot make big profits overnight.”