04 Apr 2013
First-time buyer demand tends to be more cyclical than the total market, according to FNB.
The FNB Property Barometer Q1 2013 survey reveals that this is because many young buyers have more flexibility than established households, being able to delay their own formation of a new household by remaining in their parent’s home for longer during tougher property and economic times, or by often remaining in a rental property for longer.
According to the report, the level of first-time buying, is also a good indicator of whether market conditions are improving and, given this group’s high dependence on credit, possibly also an indication of whether credit is becoming easier to obtain or not.
For 2012 as a whole, the average first-time buyer percentage of 23 percent was unchanged from the 23 percent of 2011.
On a quarter-to-quarter basis, the first quarter of 2013 saw some increase in the percentage of first-time buyers, from 21 percent in the previous quarter to 24 percent in Q1 2013.
According to the report, estate agents point to a further decline in financial pressure-related selling of homes among households.
In Q1 2013, estate agents estimate that 15 percent of sellers were selling in order to downscale due to financial pressure.
This is down from the previous quarter’s 18 percent, suggesting that a large part of the household downscaling process in order to adjust to the recessionary shock of 2008/9 may have been completed, reveals the report.
According to the report, financial pressure and constraints experienced by homeowners lead to selling.
Of significance is that for the first time since the survey question started in late-2007, the upgrading percentage has been estimated to be higher than the financial pressure-related downscaling percentage. – Denise Mhlanga
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