According to data recently released by FNB, the average age of a South African home buyer has increased from 38 to 44 this year.
In an attempt to help first-time buyers enter the market sooner, Adrian Goslett, regional director and chief executive of Re/Max of Southern Africa, walks us through the steps of saving for your first home.
“If you take a realistic look at the property market, you will discover that you will need a minimum of R100 000 to use as a deposit and to cover the transfer costs and various other expenses on an entry-level property.
“As it stands, in order to reach the targeted amount in five years, a buyer will need to save as much as R1700 a month. If you want to do it in four years, you’ll need to save R2100 a month; in three years you’ll be saving R2800 a month; in two years it will be R4200 a month, and in one year you’ll have put aside a whopping R8300 a month.
“However, for the most of us, even finding just R1700 a month will take some doing.”
STEP 1
Find a financial institution that can help you reach your savings goals. It is better to put your monthly contribution into a tax-free short-term investment that yields higher returns than a normal savings account at your bank. Chat to your financial adviser.
STEP 2
Cut back on unnecessary expenses. Pay off your clothing and other store accounts and close them as soon as possible. According to the 2014-15 World Bank Report, credit facilities make up 65% of credit usage in South Africa.
STEP 3
Take up a part-time job to earn extra cash to put into savings. There are various part-time jobs a person can do to earn a little extra cash that won’t take up too much spare time. Tutoring pays roughly R200 for just two hours a week, freelance writing at the industry standard R2 a word pays R1000 for a 500-word article, babysitting and weekend promotional work usually pays around R150 an hour.
“Admittedly, none of these steps offer a simple solution, but not all things in life can run at the speed of a social media feed. By the end of the five-year saving period, you will be able to afford a lifelong asset that will offer financial security well into your retirement,” Goslett says.
Property360
