Fewer young South Africans are buying houses than six years ago, but the houses they are buying are proportionately more expensive.
Fewer young South Africans are buying houses than six years ago, but the houses they are buying are proportionately more expensive. And in their new car purchases, they are favouring SUVs over other body shapes.
These are the findings of Lightstone, which provides market research data to the property and automotive industries. It looked at property and vehicle sales among working people of 25 years of age or younger and people aged 26 to 35 years in the period 2018 to 2023, with additional data for 2024 to date.
Residential property sales among all age groups have fallen since 2018, but they have fallen proportionately more steeply among young people, who typically represent first-time homebuyers.
Total property purchases fell from 294 859 in 2018 to 255 726 in 2023, a drop of 13%. However, purchases by people in the 26 to 35 age group fell 25% in that period, from 92 558 to 69 577. The age group accounted for 31% of purchases in 2018, and this fell to 27% in 2023.
Buyers in the 25-or-younger age group remain low for the obvious reason that not many people of that age have the money or are earning the kind of salary that would enable them to obtain a mortgage bond. The percentage of purchases in this age group has been a consistent 4% over the six years. The sales fell from 11 480 in 2018 to 8 977 last year.
But while sales volumes have dropped, Lightstone’s data shows that buyers aged up to 35 are paying increasingly more for their homes. In 2018, 29% of buyers paid between R1 million and R3m. The percentage increased to 36% in 2023, while young buyers in the R3m+ category rose from 2% to 4%. Conversely, houses priced between R250 000 and R500 000 fell from 34% in 2018 to 25% in 2023.
More than two-thirds (70%) of the buyers are first-time buyers, with the remainder (30%) repeat buyers. This proportion of first-time to repeat buyers remained relatively consistent over the six years.
According to Lightstone, the five most popular areas for buyers aged 35 or younger in the past year were:
• Impumelelo, a housing development in Devon in the Sedibeng Municipality of Gauteng (857 units sold).
• Sky City, a housing development in Ekurhuleni (446 units).
• Belhar, Cape Town (375 units).
• Erand Gardens, a development in Midrand, Gauteng (341 units).
• Clayville Extension, in Ekurhuleni (298 units).
Lightstone has also picked up interesting trends in the car market among people aged 35 or younger.
In 2024 to date, SUVs and crossover SUVs are the first choice among buyers of new vehicles, despite the vehicles being considerably more expensive than hatchbacks, which is the second-most popular shape and the shape that claimed top spot last year. Together, the two categories make up more than 80% of purchases by buyers under 35.
Hatchbacks, however, remain comfortably the top seller in the used-car market – about 45% of used-car sales to young people are in this body-shape category. The SUV/crossover is a distant second, at about 24%, but is gaining popularity, mirroring the growth in the new market. Sedans are holding onto third place among the body shapes preferred by under 35s, but with a shrinking share of the market.
The top five most popular car brands have remained unchanged over the past two years. Volkswagen is the leading brand, followed by Toyota, Ford, Suzuki and Nissan. The top five brands make up about 65% of new and used-car sales to the under-35 age group.
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