Citymark Focus Note: First-time Home Buyers

With support from the Cities Support Programme of National Treasury, the Citymark project undertakes analysis of South Africa’s residential property markets, with a particular focus on the lower end of the market. Utilising title deeds data obtained from Lightstone Pty Ltd, the analysis separates the market into five segments, allowing the careful examination of the differentiated performance of the entry level (under R300 000), affordable (R300 000 – R600 000), conventional (R600 000 – R900 000), high-end (R900 000 – R1.2m) and luxury (over R1.2m) markets.

This First-time Home Buyers Note provides an analysis of first-time home buyers/owners to show both how the housing market is growing, and how households are joining the property ladder. In 2019, the majority (60%) of first-time home buyers in South Africa accessed their housing on the resale market, indicating that the resale market is the main means for first-time home buyers to step onto the property ladder.

Of the 94 157 households who became first-time home buyers/owners in 2019, 21% were beneficiaries of government’s subsidised housing programmes. In the entry market, 90% of transactions by first-time home buyers were actually new registrations of government subsidised properties for beneficiaries. This shows how critical government housing programmes are as a means for lower-income households to own a house for the first time.

Almost half (45%) of first-time home buyers entered the property market at the low end, thus acting as significant drivers of transaction activity in the entry and affordable markets.

The note considers the impact and driving forces of first-time home buyers, in the context of COVID-19. It highlights the implications for affordable housing and recommendations for metro support for the first-time home buyers market.

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