While Cape Town is often considered as being too expensive for first-time property buyers, there are some exceptions.
Karla Coetzee, Seeff’s manager for the northern suburb areas of Kraaifontein, Brackenfell and Kuils River, points out that as much as 30% to 40% of all buying in these areas are millennials, often first-time buyers.
This is notably better than the average of around 6.64% for Cape Town for the first half of last year reported by a recent FNB Property Barometer and also higher than the national average of 21% cited by the report.
Ms Coetzee notes that the suburbs are also particularly well suited to family buyers and offer outstanding value. It is for this reason that all three suburbs were recently included in a ranking of the city’s top 20 most affordable suburbs by PrivateProperty.
Top of the list for Millennials, is Kuils River with some 40% of all buyers falling under the 35-year age bracket. Despite the challenging economic conditions, she says that the suburb continues to offer outstanding value with entry-level prices of around R980 000 for full title houses and just R500 000 for flats.
Although over 80% of all properties are full title, the area is now home to a number of popular estates which offer modern finishes and luxury living.
Kraaifontein comes in at just below with 37% of all buyers falling within the millennial age group. Prices are also still very accessible, ranging from around R600 000 for apartments and R1.1 million for houses, says Ms Coetzee.
“The growth rate in Kraaifontein has been phenomenal this year and we hope to see more of this in 2018.”
While Brackenfell prices are a little higher, they are still very accessible, hence about 30% are millennial buyers, she says. Prices range from around R750 000 for apartments, upwards of R1.5 million for townhouses and houses.
“Millennials with children love the well-known schools that are within walking distance to their homes.
“Aside from millennials, these suburbs are very popular with family buyers as they offer excellent value with a choice of homes in the R2 million to R4 million range along with plenty of luxury options, priced upwards to around R6 million that offer more space, a bigger plot, extra garaging and a swimming pool.”
Despite the affordability, property values continue to grow at excellent rates, says Ms Coetzee. The latest FNB Property Barometer, for example, points to the Durbanville-Kraaifontein-Brackenfell sub-region going from 8.8% growth in the second quarter of 2017 to 9.1% in the third quarter.
Most young and first-time buyers require mortgage finance and Ms Coetzee gives a few guidelines for new buyers. “The first thing you will need is a good credit record and an affordability test to show that your income is at least three times the monthly bond repayment and you are not overburdened by debt.
“Be sure to build in an allowance for cost hikes such as a potential interest rate increase next year should the economy weaken further.”
She says that first-time buyers especially should ensure that they buy within their means and budget for the extra expenses that comes with buying your first home. These include the transactional costs including transfer duty (the first R900 000 of the purchase price is exempt), bond registration and attorney costs.
In addition to that, you will need to budget for your moving expenses as well as setting up your new home. These costs would include service connections, ranging from basic municipal services to telephone, internet and satellite television.
If you are buying sectional title property, be sure to also find out what additional monthly levies apply and ensure you budget for those, she adds.
There may also be additional security costs to install an alarm system and contract an emergency response service, especially in a freestanding property.