Is owning a home really a distant dream for South Africans? Here’s why industry insiders say no

Many South Africans harbor a dream of owning their own property, yet the true secret to achieving this lies in knowing when and how to enter the market. While renting offers flexibility, short-term manageability and a lifestyle stop-gap, research indicates that over 90% of tenants in South Africa would prefer to own their properties. Factors such as rising cost of living, political uncertainty at home and abroad, and fluctuating career prospects make early decision-making crucial.

Recent Ipsos study revealed that South Africans are more optimistic about homeownership compared to their international counterparts, with only 38% of local tenants believing they would never be able to afford their own home, compared to 56% globally. Astonishingly, 89% of tenants stated they would prefer to own their properties, with 74% believing it is difficult to achieve true financial security without owning a home.

Michael Coulter, head of product economics at Standard Bank Home Services, explained that renting essentially pays for the right to occupy a property for a specific period, while bond repayments also reduce the loan balance, allowing homeowners to build equity. He urged aspiring homeowners to consider their own circumstances and financial ambitions rather than merely following statistics.

Coulter advised potential buyers to look beyond the desired dream home, which might be 10 to 15 years away, and purchase a suitable property instead. This approach enables homeowners to accumulate equity, which can later be leveraged to fund second home purchases.

A common misconception is the necessity of a deposit, which Coulter clarified is not always required. While a deposit does help by reducing the loan value, resulting in lower monthly repayments or shorter loan periods, Standard Bank now offers up to 108% bond financing specifically for first-time home buyers. This financing covers additional purchase costs such as transfer fees and bond registration. Additionally, Standard Bank offers discounts on bond registration fees and built-in cushions for hidden home expenditures.

Monthly rental expenditure may seem slightly lower than bond repayments, but transitioning from a tenant to a homeowner is often perceived as more practical than it appears. Coulter urged potential homeowners to consider the long-term benefits, emphasizing that deciding to buy a home is not just about having a roof over one's head, but also about creating a legacy for future generations.

Even renting provides flexibility, but it delays homeownership and reduces the time available to build equity and reap the long-term advantages of home ownership.