A home for every stage of your life
Homeownership is about more than having a roof over your head. It's about relationships, emotional milestones, and the stage of life you're in. Carl Coetzee, CEO of BetterBond, offers some advice for buying a home at different times of your life.
Carefree 20sMost people start their property journey as tenants, renting a room or a flat when they move out of their parents' home. 'In your 20s, you are just kickstarting your career and enjoying your independence. But it is never too early to start thinking about your long-term investment prospects,' says Coetzee. He advises aspirant young buyers to limit their debt so that they maintain a healthy credit score. 'While renting a property is convenient and cost-effective in the short-term, it makes more financial sense to pay off your own bond. Also, with the prime lending rate at a record-low 7%, there has never been a better time to apply for a bond.' Coetzee recommends focusing on property as soon as you become financially independent, and other debts such as student loans are under control.
First-home buyers in their 20s can make the R1 million threshold for transfer duty work strongly in their favour when looking at properties. 'Almost 40% of all BetterBond's applications for the 12 months ending September 2021 were between R500 000 and R1 million.' Coetzee says sectional title units are usually popular with first-home buyers as they offer security and require little maintenance. It may also be more affordable to buy off-plan in a residential development, as there are no transfer costs.
Thriving 30sIn your 30s, you are more financially stable, and probably planning ahead as you think about getting married and starting a family. This is often the decade when you first seriously consider homeownership. BetterBond's applications for 2021 show that the average age of first-home homebuyers is 36.
'More than a year of record-low interest rates has seen a significant increase in first-home buyers applying for bonds,' says Coetzee. The average first-home purchase price is just over R1.1 million, according to BetterBond data for the 12 months ending September 2021. About 60% of BetterBond's applications in this period were from first-home buyers. Sectional title properties remain popular as entry-level homes, particularly with women buyers and single moms. They are also excellent investment properties as there is a strong rental demand for sectional title units.
For buyers who are recently married, or planning a family, it's important to consider buying a home that you can grow into. While a one-bedroom home will work initially, it may be necessary to upscale to a larger home with more bedrooms as your family grows. 'This may also be a good time to rethink the location of your home. While it is possible to work remotely, and there is less need for proximity to the office, a growing family will need to be close to preschools and schools. Other amenities within walking distance should include parks and green spaces where you could spend time as a family,' Coetzee advises.
He adds that certain features help make a home child-friendly, especially if the buyer is planning a family or has young children. 'Look for homes that have plenty of storage space. Parents with babies and young children will also want to have a bath - not just a shower.' He adds that safety is non-negotiable with young children, so make sure the garden is enclosed and that the swimming pool is covered. A property with a steep staircase is not ideal if there are children just starting to walk. An open plan design that lets you keep an eye on younger children at all times is a good option at this life stage. Meanwhile, young professionals who are most likely working from home will want a property that can accommodate at least one home office, and that offers excellent internet connectivity.
Family-focused 40sThis is the decade when the family's demands on a property are likely to peak. Growing children need space and they want to be close to friends and school. According to the FNB Estate Agents Survey (July 2021), upgrading to a larger or more desirable home accounted for 16% of all transactions in the second quarter of 2021, up from the long-term average of 13%. The pandemic has shifted homeownership patterns, with families realising that quality of life is paramount.
This increased demand for houses with gardens or access to parks, rooms that can be used as home offices, and ample space for pets, means that house price growth in the freehold market has surpassed that of sectional title properties, according to Lightstone data for July 2021. As children get older, their needs change too. Teenagers will want their own bedrooms, as well as a chill-out room or TV room where they can relax with friends. Properties that include swimming pools and entertainment areas are popular with families at this life stage.
Coetzee advises this age group to use the current lending environment to their advantage 'Homeowners who are able to pay extra into their bond, despite the low interest rates, will not only reduce the amount of interest they have to pay. They will also be able to shave years off the loan repayment period, freeing up cash flow at a stage of their life when they may want to travel or invest in a property for their older children.'
Less-is-more 50sA large portion of house sales that took place in the second quarter of 2021 were by homeowners downscaling due to a change in life stage according to the FNB Estate Agents' Survey (July 2021). Many of these transactions were from empty-nesters who decided that owning a large home when the children had moved out was no longer necessary. 'Downsizing a property need not mean that the value of the next home will always be less. In many cases, these buyers have more financial leeway to spend on a home that meets their needs,' explains Coetzee. According to BetterBond's application data for September, the average purchase price for buyers in this age group over the past 12 months was R1.62 million, compared with their counterparts in their 30s who are spending on average R1.36 million on a home.
For empty-nesters, a change in homes could mean moving to a lifestyle estate that offers a host of amenities and activities. Alternatively, if their children have moved overseas, a lock-up-and-go property will be more desirable than a larger family home that demands attention and maintenance. 'We often see buyers in this age category buying inner-city luxury apartments that could be close to work, or to amenities that they enjoy,' observes Coetzee.
Alternatively, this age group can afford to move away from urban centres to areas usually associated with holiday accommodation. 'In September, Lightstone highlighted Towns With Churn across the country where buyers are relocating to new developments. Hartenbos near Mossel Bay is an example of a town bustling with buyer activity, with over-50s showing a keen interest in newly launched estates in the area.
The notion of retirement has certainly evolved, says Coetzee. 'People are living longer, and enjoying more active lives. So the focus has shifted from retirement to wellness, with a growing need for accommodation that offers a range of benefits.' Retirement lifestyle villages with various property options to meet retirees' evolving needs have become popular. While a freestanding home is ideal for a couple, a widow may prefer a smaller home or an apartment.
These villages offer wellness amenities such as gyms and swimming pools, as well as opportunities for social engagement. 'The pandemic has highlighted the importance of being able to safely interact within a community. Lifestyle retirement villages allow for this, and also ensure that all safety precautions, such as controlled access to the properties, are in place,' says Coetzee. There is also on-site medical and frail care.
Whether buying or building a new home, there are features that will make it attractive to buyers in this age cohort, says Coetzee. Smart technology, that includes Wi-Fi to allow for easy communication with family, is a must. Many have also shifted to online medical consultations since the pandemic. Single-level homes with wider passages and no stairs will make it easier to accommodate assisted living arrangements when needed, adds Coetzee. Look for a bathroom with a walk-in shower. Security is also top-of-mind for retirees and their families who may not live nearby.
'There's no one-size-fits-all when it comes to choosing the ideal home. As your needs change, depending on your life stage or your family's requirements, so too will expectations for your home,' concludes Coetzee. 'Fortunately, with the current favourable lending environment, there is ample opportunity to make the best choice to suit your current lifestyle.'