Recent studies show that first time buyers and trade up buyers enter in to the property market for different reasons.
First time buyers are more concerned about affordability and proximity to the workplace. Often first time buyers enter the property market with high debt-to-income ratios with no savings towards deposits and this impacts on the size of the house. There is rising demand, amongst first time buyers, for houses closer to public transportation points as more and more people prefer using public transportation owing to increasing fuel costs, traffic congestion and the imminent e-tolls in the case of Johannesburg residents.
Trade up buyers, on the other hand, are attracted to features of the home, design and more importantly, the location. Trade up buyers often have bigger deposits to put down towards the new home due to past experience, time and opportunity to add to their equity from acquiring the previous home.
Research shows that the size of the house is paramount as they had to compromise on this the first time around and usually enter into property due to growing needs. Homes with energy-saving features attributable to rising electricity prices are another reason for trade up buyers to enter into the property market. Furthermore South African trade up buyers are most concerned about security with the high crime rate. Studies show that South Africans are willing to pay top dollar for a home with state-of-the-art security systems. Such houses also yield a great return on investments.
The good news is that the property boom in South Africa allows for a varied choice whatever kind of home buyers are looking for.