Too young for property?
Too young for property?
Young people are putting off buying their first home for social reasons as well as financial ones according to UK research, a phenomenon that is evident in South Africa too.
Saul Geffen, Chief Executive of MortgageSA, says that while high prices are obviously a deterrent to young people getting onto the property ladder, huge lifestyle changes and priority shifts are a major factor also contributing to affordability problems.
According to research from UK mortgage lender GE Money Home Lending, the average age of a first-time buyer in Britain has risen by 26 percent over the past 30 years, from 27 in 1977 to 34 today.
Clearly some of this increase can be put down to soaring house prices, with the average cost of a property rising by 1436 percent over the period. Also, people are shifting priorities.
And this is similar to what is happening in South Africa as more people choose to focus on their careers, travel and delay having children. Women in particular are keen to establish their own careers before a trip to the altar.
Delaying the purchase of a first home hinders affordability.
Geffen says that worldwide there has been a move away from traditional family-oriented motivations and the desire to gain independence and experience delays the purchase of a first home and contributes to the ongoing affordability issues faced by these consumers.
The report says that in 1977, 30 percent of 25 year olds in the UK were keen to buy their first place and 20 percent wanted to tie the knot. Today, only half as many young people name these as priorities. Also, one in 10 young people in 1977 said having children was important to them, compared with just seven percent today.
The research also shows that young people today rate having satellite television above having children.
This shift in attitudes has led to an increase in the average age at which people get married in the UK - rising from 24 to 31 over the past 30 years - while people are now around 30 when they have children compared with 27 in 1977, says Geffen.
In 2004, according to StatsSA, the median age for females marrying for the first time was 28 years, while the median age for males marrying for the first time was 32 years.
Young buyers need to be mindful however that their lifestyle choices may contribute to their affordability problems.
Pursuing life experiences and leisure has increased young peoples personal debt levels, while delaying house purchase meant prices were continuing to rise out of their reach.
Buying a home is one of the most savvy investment decisions young people can ever make. Its fundamental to wealth creation.
Article from: www.iafrica.com