As we head to the early part of the new year, the period when many first time buyers tend to start looking for their own home, it is encouraging to note that while Cape Town is billed as too expensive for first time buyers, there are many exceptions.
Karla Coetzee, Seeff’s Manager for the Northern Suburbs’ areas of Brackenfell, Kraaifontein and Kuilsriver points out that as much as 30% to 40% of all buying in these areas are to millennial, often first-time buyers.
This is notably better than the average of around 6.64% for Cape Town for the first half of this 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 twenty most affordable suburbs by PrivateProperty.
Top of the list for Millennials, is Kuilsriver 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 R1.1m 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 R1.5m 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 R2m-R4m range along with plenty of luxury options, priced upwards to around R6m that offer more space, a bigger plot, extra garaging and a swimming pool.
All of these suburbs enjoy good access to the N1 and R300 and offer a laid-back, country lifestyle, yet with immediate access to excellent public and private schools along with shops, conveniences and busy commercial centres that service the local areas. The areas are also close to the Winelands towns including Paarl and Stellenbosch.
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-Brack
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 attorneys cost.
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. There may also be additional security costs to install an alarm system and contract an emergency response service, especially in a freestanding property.
The Brackenfell, Kuilsriver and Kraaifontein areas remain among the most sought-after property areas and Ms Coetzee expects that there will always be good opportunities for sellers and buyers.