Millennials now comprise up to 40% of all property purchasers.
Category Property Market
Millennials are increasingly heading to the property market according to agents from the Seeff Property Group. Data from Lightstone confirms that this buyer demographic now comprises upwards of 30% to 42% of all property purchasers, especially in the main urban areas.
The millennial buyer's market is predominantly below R1.5 million and they usually fall in the under-35-year age bracket. While affordability is a key driver, Seeff says graduates with professional jobs tend to spend up to R2.5 million, especially couples who are married.
According to an American survey released in mid-2022, 65% of millennials view homeownership as a top sign of success. It is therefore not uncommon to find high earning millennials looking to not only own the roof over their heads, but to also invest in the buy-to-let property market.
Lightstone data shows that the highest volume of millennial buyers tend to be in Gauteng which still offers significant affordability. Young buyers can still find excellent value in areas such as Randburg where up to 39% of buyers are below 35-years of age.
According to Duane Butler, licensee for Seeff Randburg, popular areas for affordability include Weltevredenpark, Wilgeheuwel and Allens Nek where you can find sectional title units starting from R650,000 and some homes starting from around R1.2 million.
Midrand at 42% appears to be particularly popular with millennial buyers. According to Charles Vining, MD for Seeff Sandton, young buyers make up a sizable portion of the market along with families given the excellent childcare facilities and schools. About 70% of transactions over the last year fall below R1.5 million.
Interestingly some 38% of buyers in the Sandton area are also in the millennial age bracket. The area is particularly popular with upwardly mobile buyers according to Vining and they may spend a little more for the convenience and status of living in Sandton. Soweto is another affordable choice for young buyers who now comprise around 34% of all buyers.
Centurion in Pretoria is another hugely popular area with younger buyers, comprising about 35% of sales activity over the last year. According to Tiaan Pretorius there are a number of very affordable areas for young buyers such as Doringkloof, The Reeds and Highveld where you can find a two-bedroomed apartment for R800,000 and a full title home for under R1.7 million. The area is particularly family-friendly and thus popular with young couples as well.
Ekurhuleni (East Rand) is another top choice for young buyers which comprise some 40% of all buyers over the last year. Areas such as Brakpan (35%), Benoni (37%), Boksburg (39%) and Springs (35%) are especially popular with the growing middle class. Lightstone data also shows that over 80% of all sales in the area are below R1.5 million.
While Cape Town is more expensive, millennials are nonetheless investing, making up over a third of all sales over the last year. You can even find the odd apartment in the sought-after CB area for between R1.2 million and R1.5 million according to Ross Levin, licensee for Seeff Atlantic Seaboard. Deeds Office data in fact shows that some 39% of sales over the last year in the Cape Town CBD were to millennials.
Other popular choices in Cape Town include the Northern Suburbs areas such as Brackenfell and Kraaifontein where you can find plenty of sectional title property below R1.5 million according to Seeff's agents.
The Blouberg area is also hugely popular with younger buyers who comprise around 35% of the market according to Lightstone. Cliton Martle, licensee for Seeff Blouberg says the area is also seeing a significant influx of young semigration buyers from the inland provinces with the beach and surfing lifestyle being a big drawcard. Suburbs such as Parklands and Table View are the most affordable for younger buyers.
In the eThekwini/Durban area, only about 29% are below 35-years while young buyers in Richards Bay make up about 32% of all sales. According to Elaine Chetty, licensee for Seeff Richards Bay, the town is particularly popular with upwardly mobile buyers and the market remains steady with last year's sales volumes still slightly ahead of the pre-pandemic levels.
In the Eastern Cape, despite the relative affordability compared to the other big metros, only 26% of buyers in East London are below 35-years. In Gqeberha, it is 31% which is closer to the averages in the big metros. Bloemfontein also remains particularly affordable and attractive for young buyers who account for some 32% of all sales over the last year.
The needs of millennial buyers and what they look for in property is somewhat different compared to the older generations. Millennials have grown up with technology and look for convenience above all else. They tend to prioritise location, energy efficiency, home office space, low maintenance, technology, and outdoor space.
Millennials view SA property as a good investment as was clearly evident from the tremendous boost in sales to the under 35-year demographic during the Covid-boom when the interest rate was so low, concludes Samuel Seeff, chairman of the Seeff Property Group.
Author: Property24
