A guide to buying your first home

Almost 60% of South African homes are owned or co-owned by women, and women are increasingly buying property without a spouse or partner.

“Many will be first-time buyers who are hesitant to commit because they feel they are unable to afford such an investment,” says Renier Kriek, Managing Director at Sentinel Homes.

As someone who deals with single or unmarried property seekers regularly, Kriek offers some good advice to help you find the best way to finance your purchase.

Rise Of The Female Homeowner

As modern family dynamics change, one demographic statistic indicates that more than 40% of South African children now live with their mother only.

This is greater than the number residing with both parents or another related adult.

“Traditionally, it is believed that homeownership is one way to create the stable and secure setting that is conducive to childrearing.

This cultural attitude, coupled with demographic changes, may explain the surge in women buyers,” says Kriek.

Yet, buying a property on a sole income can be daunting for anyone, regardless of gender, especially since property prices have risen faster than salaries over the past 70 years.

Nevertheless, Kriek notes that despite interest rates uncertainty, pent up demand and structural housing undersupply will likely continue to support property buoyancy, even despite headwinds like the uncertain geopoliticl environment and the cost squeeze households will face due to rapidly rising fuel prices.

Buying now, or holding off for the full impact of rising fuel prices, is probably preferable to waiting much longer, especially for those buyers who must stand on their toes to buy a property in the first place, such as single men and women who only have the benefit of one income.

“With the current market outlook, it is the ideal time to invest in a home that’s still affordable in most South African sub-geographies, and especially in Gauteng,” he says.

Buying A Home On A Solo Budget

To find the best property, you first need to decide how you will pay for it.

Here are some great tips to consider:

Your primary concern is how much you can get together for your investment.

This starts with an honest assessment of your financial position and credit record, since you will likely need to apply for a bond, which may require a substantial deposit.

Then, do your research to discover alternative financing solutions.

For example, the government’s First Home Finance subsidy offers qualifying applicants free financing in the form of a once-off capital subsidy that can be combined with other housing products, like mortgage loans.

The options are out there, you just need to find them.

However, don’t be tempted by shady, informal loans or by the allure of using unsecured lending for housing purposes, that make getting into debt easy but whose crushing rates will eventually leave you impoverished - and maybe even homeless.

Next, implement sensible lifestyle changes.

Now is a good time to start paying off lesser debts to free up disposable income and improve your credit rating.

Also ask yourself which expenses you’re willing to live without, like your Netflix subscription or weekend takeaways.

It all adds up.

Ask your employer if they provide assistance with property purchases.

For instance, some banks may offer certain staff home loans with low or no deposit, and some employers may offer formal or informal programs of assistance to those who wish to buy, like a housing subsidy.

Most importantly, be aware that every property comes with initial and monthly costs, some obvious and some hidden.

Upfront, you’ll face transfer and registration fees, and transfer duty.

Then, there are the ongoing and ad hoc costs, such municipal costs, sectional title levies and consumption costs.

You are also responsible for home maintenance and repairs, and other infrequent expenses that don’t normally affect tenants.

Make sure you work these into your calculations.

Getting Value From Property

Now, consider the best type of property to buy.

Most single people prefer a lock-up-and-go home, like a property in a sectional title complex.

Currently, sectional titles make up more than half of the properties in the country due to their excellent value-for-money proposition.

For instance, they allow you to enjoy many of the benefits of a free-standing property, albeit in a communal setting.

The cost of security, gardening, property maintenance, a swimming pool and entertainment areas, and more, is shared among owners, making these amenities affordable and accessible to each.

“Given the demand, this is also the easiest property to sell when your lifestyle needs change, again making it the best for a first-time owner,” says Kriek.

If your employer is open to you working remotely, or you can run your own business remotely, you may find better value in rural or peri-urban areas or in the countryside.

In such regions, your bond might be cheaper than your current rental, so keep an open mind.

Also, determine if the property could somehow pay for itself.

A granny flat or spare room that can be rented out for additional income certainly helps to ease bond repayments.

Lastly, buy with the end in mind.

One day, you may want to sell your starter home for the highest price you can get.

To ensure its value keeps pace with the market, look at the basics most buyers demand, such as its proximity to schools, shops, hospitals, daycare and similar amenities.

Also, try not to buy property in declining areas – low prices may in fact be a value trap.

The Rewards Of Due Diligence

As a single person, your first home might seem like a distant dream, but it could be more affordable than you think.

“As long as you are willing to do your homework, you might be surprised at what is possible and how soon you can have what you want,” says Kriek.