Fin 24 -Younger buyers are starting to struggle to get on to the first rung of the property ladder, said an industry analyst.
According to BetterLife home loans statistics, over the past 12 months, home loans granted for between R500 000 and R1m, declined from 40.2% to 38.6%.
However, this drop in percentage of home loans to younger people is not due to a decline in demand, said BetterLife Home Loans CEO Shaun Rademeyer.
“[T]he 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%.
“But the banks are becoming increasingly cautious when it comes to approving new loans and are applying very strict credit qualification criteria,” said Rademeyer.
Statistics show banks currently decline almost two-thirds (66%) of home loan applications.
BetterLife’s data also showed that on average buyers over-50 are currently paying about twice as much for their homes, compared to buyers under-30. But over-50’s only pay about 30% more on their monthly bond repayments in relation to under-30’s.
“Buyers aged 50 to 60, are paying an average of R388 000 as a deposit, which takes their average bond down to R949 000 and monthly repayment to R9 475. The average deposit size for over-60s currently is R674 000, which puts their average bond at just over R1m and average monthly repayment at around R10 000,” said Rademeyer.
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.
Fin24 previously reported that South Africans are turning to unsecured debt to service home loans. About 30% of homeowners borrowing short-term unsecured debt, DebtBusters CEO Ian Wason told Fin24. This is in order to keep home loan payments up to date.