Good Buying Conditions For Second Home Buyers In The South African Property Market
Buying a second property as a potential investment is being driven by record-low interest rates and the increased negotiating power buyers have in the current market.
Average Age Of Buyers Purchasing A Second Property
According to Lightstone the forecast looks to be sunny and clear skies ahead for buyers in the age group 25 - 40, who account for the largest proportion of buyers purchasing a second property. Millennials account for 56% of buyers purchasing second properties while the Baby Boomers (age 49 to 64) makes out only 17% of the buyers. Buyers above 65 years of age account for only 6% of all second home buyers
So, what type of second properties are the most popular?
Sectional title property sales among second property buyers have declined from 26% in 2010 to 18% in 2020, while freehold and estate property sales prove more popular. Freehold property sales in 2020 forms 64% of all second home sales and estate property 18% - the same percentage as sectional title property.
While freehold second property purchases have remained constant over the past few years, sales among second property buyers in estates have grown from 17% in 2010 to 21% in 2019. On the flip side sectional title sales have dropped sharply from a high of 27% in 2013 and 2014 to 21% in 2019. The growth in sales in estates can be attributed to the benefits estates offer in comparison to sectional title properties - greater security along with the benefits that come with freehold ownership.
Proportion of second properties bought in the same province as the first
Buyers undoubtedly prefer purchasing properties in the same province they reside in and have their primary residence. This is most likely because they know the province and if they're buying-to-rent than managing a property in the same province as where they live is that much easier.
What is interesting is that buyers from the coastal provinces buys even more "localised" or in the same province they own their primary residence - e.g. Western Cape (91%), Kwazulu-Natal (84%) and Eastern Cape (87%) are much more locally focussed than e.g. Limpopo (71%), Mpumalanga (73%) and North West (75%).