Johannesburg - Affordability issues have pushed up the average age of residential property buyers to above 43 years old from levels near 40 years old in 2007, and reduced the average monthly volume of transactions to about a third of the peak in late 2003.
FNB household and property sector strategist John Loos said on Wednesday that deeds office data revealed on a three-month moving average basis there were 23 363 residential property transactions in the third quarter of last year. This was slightly more than a third of the peak volumes of more than 60 000 in late 2003 at the height of the residential property boom.
He said much of this weakness in transaction volumes that had persisted, despite some small improvement following the end of the 2008/09 recession, had to do with affordability issues after the massive house price boom in the last decade.
He said younger buyers, many of whom were first-time buyers, were most sensitive to affordability changes and FNB estimated the monthly average number of transactions by individual property buyers under the age of 40 to be 10 409 for the third quarter of last year.
“This is roughly one third of the peak level reached at a stage in 2006. This number not only compares poorly with the peak of the boom, but even with 1998 estimates that put the monthly average nearer to 20 000,” he said.
However, Loos stressed that the sharply lower number of individual buyers below the age of 40 did not necessarily mean that the number of first-time buyers was quite as sharply lower.
Author: Roy Cokayne - IOL