Buying property - Is it the right move for young people?

Young people need to understand the long-term financial commitment and responsibilities that come with buying a home. Picture: Freepik

Young people need to understand the long-term financial commitment and responsibilities that come with buying a home. Picture: Freepik

Published Jun 25, 2024


As young people navigate financial independence, the question of whether to buy or rent property arises.

According to Lightstone data, most property buyers that are 35 or younger are new to the property market with 70% to 71% of first-time buyers falling within this age group.

Owning a home can be a significant investment opportunity provided that the property appreciates in value plus it can give you peace of mind knowing that you have a place to put down roots.

But before you take this step it is important to understand the long-term financial commitment and responsibilities that come with buying a home.

Acording to Sarah Nicholson, operations manager,, it is crucial that potential property buyers weigh the benefits of buying a home against other financial priorities.

“You need a stable income to save for a deposit and make repayments, and a solid credit score to secure a favourable interest rate. You should also understand the obligations of home ownership, such as paying for insurance and maintenance,” Nicholson said.

“This involves assessing your financial health, including your income, savings, and existing debts, to decide on a realistic budget for buying and owning a home.”

Some lenders will not extend a home loan to clients that are under the age of 35 therefore young people should plan carefully before they take the plunge.

Nicholson said that if you are set on buying a property, saving for a deposit is essential and it can increase the possibility of a person getting a home loan application approved.

He offers the following tips for young adults to boost their deposit savings and increase the chances of getting a home on their own:

– Create a detailed budget and savings plan

– Set achievable savings goals and milestones

– Automate savings transfers to a dedicated account

– Cut unnecessary expenses

– Increase your income through side hustles or freelance work

– Invest any windfalls you receive, such as a tax repayment or work bonus

– Explore government assistance and incentive initiatives

– Monitor and maintain a good credit score for better home loan terms

Nicholson said that young people should consider low-risk investment options because they may offer higher returns than a term deposit.

Navigating the complex property transaction processes can be daunting, so it’s advisable that young property buyers seek guidance and support.

Using tools like home loan calculators as well as speaking with a reputable bond originator and a financial adviser, can help you make an informed decision.

Lifestyle choices

It is vital that you review your lifestyle preferences before you buy a property. It may be worth paying more for a home that suits your needs in terms of location, size, and proximity to amenities, instead of selecting a cheaper property without those benefits.

It’s also worth checking market trends and resale values, to ensure the investment aligns with your long-term financial goals.

Housing prices have dropped in SA suburbs, but this can be due to factors such as deteriorating infrastructure, potholes, load shedding, and water cuts this so you need to do your homework.

“Reduced property prices may offer a more affordable entry point into the housing market, allowing buyers to get a larger or better-located property than was previously possible,” Nicholson said.

Lower prices also mean lower bond repayments and potentially reduced property taxes, offering immediate savings.

Plus buying when the market is down allows buyers to benefit when market conditions stabilise or improve which offers potential long-term investment gains.

“It’s crucial for young buyers to conduct thorough research into local market conditions, seek professional advice, and ensure financial stability before making an offer on a home,” Nicholson said.

“With careful planning, financial readiness, and a clear understanding of personal needs and market trends, young adults can navigate the complexities of buying a home and secure a more stable future.”

IOL Property