Unveiling the millennial takeover: The younger generation currently dominates the South African property market
Lightstone data reports that millennials have emerged as a significant segment of property buyers, comprising 30% to 42% of the market, especially in major urban areas. The majority of these buyers are also under the age of 35. Samuel Seeff, chairman of the Seeff Property Group, highlights the attractiveness of property investments to these millennial buyers, as many choose to purchase property and then let it out.
But why the sudden influx of millennial buyers? A survey in the United States reveals that 65% of millennials view homeownership as a major marker of success. This has led to millennials’ growing interest in owning homes and exploring buy-to-let investments.
Seeff observes that the majority of millennial buyers tend to seek out properties below R1.5 million, as affordability is a priority for many. Still, graduates with established careers often extend their budget to around R2.5 million, particularly when they marry.
What Makes a Great Property Investment Opportunity for Millennials?
Millennial buyers have distinct preferences and requirements regarding the properties they consider purchasing. Having grown up in a digital age, convenience takes precedence. They also tend to prioritise location, energy efficiency, the presence of a home office space, low maintenance requirements, integrated technology, and access to outdoor areas.
Property Investment Opportunities in Gauteng
Seeff notes that millennials in South Africa are drawn to Gauteng, particularly areas like Midrand, Randburg, and Sandton. With economic opportunities and an exciting lifestyle, it’s safe to say that Gauteng has become a top choice for millennials looking to buy their own property.
Duane Butler, licensee for Seeff Randburg, highlights several sought-after neighbourhoods known for their affordability: Weltevredenpark, Wilgeheuwel, and Allens Nek. These areas boast sectional title units from R650,000, while some homes start at approximately R1.2 million.
Property Investment Opportunities in Midrand
Millennial buyers under 35 account for 42% of Midrand’s market activity. According to Charles Vining, Managing Director for Seeff Sandton, Midrand’s exceptional schools and childcare facilities attract young buyers and families.
Regarding property prices, approximately 70% of transactions over the past year have been for homes priced below R1.5 million.
Property Investment Opportunities in Sandton
Approximately 38% of buyers in the Sandton area fall within the millennial age bracket. Vining Camerer Inc. reports that buyers with their eye on Sandton properties generally seek convenience and the prestigious status of living in the area. Consequently, they are willing to invest more money to reside in Sandton.
Soweto also presents an attractive and affordable option for young buyers, who now constitute around 34% of all buyers in the area.
Property Investment Opportunities in Pretoria
Centurion in Pretoria has emerged as another highly sought-after area among younger buyers, representing approximately 35% of sales activity in the past year. The family-friendly environment makes Centurion a hotspot for young couples and families alike.
Tiaan Pretorius identifies three affordable neighbourhoods for young buyers: Doringkloof, The Reeds, and Highveld. You can expect to find two-bedroom apartments priced at around R800,000 in these areas. Full-title homes are less than R1.7 million.
Property Investment Opportunities in Ekurhuleni
Ekurhuleni, located in the East Rand, accounted for approximately 40% of all buyers in the past year. The areas within Ekurhuleni, including Brakpan, Benoni, Boksburg, and Springs, have garnered significant popularity among the expanding middle class.
Lightstone data reveals that more than 80% of all sales in Ekurhuleni fall below the R1.5 million price range.
Property Investment Opportunities in Kwa-Zulu Natal
Kwa-Zulu Natal, specifically the cities of Durban and Richards Bay, offer a unique blend of natural beauty and urban amenities that appeal to the younger generation in South Africa. In Richards Bay alone, millennials make up about 32% of all sales. Within the eThekwini/Durban area, the proportion of buyers below the age of 35 is approximately 29%.
Elaine Chetty, the licensee for Seeff Richards Bay, affirms the town's popularity among buyers and notes that the market has remained stable, with sales volumes from the previous year slightly surpassing pre-pandemic levels.
Property Investment Opportunities in the Western Cape
Despite being known for its myriad of luxury properties and high prices, Cape Town continues attracting millennial investors, constituting over a third of all property sales in the past year. Data from the Deeds Office reveals that approximately 39% of Cape Town Central Business District (CBD) sales were made to millennials.
Ross Levin, the licensee for Seeff Atlantic Seaboard, highlights that it is still possible to come across the occasional apartment in the sought-after CBD area priced between R1.2 million and R1.5 million.
Seeff also observes how Northern Suburbs areas like Brackenfell and Kraaifontein are becoming increasingly popular with millennial buyers. Our expert Property Practitioners confirm that these areas offer a variety of sectional title properties below R1.5 million, which is considered relatively affordable and thus caters to the needs and budgets of millennials seeking to enter the housing market.
Property Investment Opportunities in Blouberg
Young buyers are flocking to the Blouberg area, representing approximately 35% of the market, reports Lightstone. Cliton Martle, the licensee for Seeff Blouberg, notes that the region is also witnessing a notable increase in young semigration buyers from inland provinces, drawn by the allure of the beach and surfing lifestyle.
For millennials, suburbs like Parklands and Table View offer the most affordable options.
Property Investment Opportunities in the Eastern Cape
In the Eastern Cape, Gqeberha and East London are emerging as attractive destinations for millennials in South Africa. Gqeberha, with its beautiful coastal scenery and pleasant climate, offers a relaxed lifestyle that’s hard to resist.
East London sees a smaller percentage of buyers below the age of 35, with approximately 26% falling within that age group. On the other hand, Gqeberha (formerly known as Port Elizabeth) displays a higher percentage at 31%, which aligns more closely with the averages seen in the larger metropolitan areas.
Property Investment Opportunities in the Eastern Cape
In the Free State, Bloemfontein stands out as a popular choice for millennials. With a growth rate of 32%, Bloemfontein presents a particularly affordable and appealing option for young buyers as it offers a mixture of affordability and qualified living. Millennials made up around 32% of all sales in the area over the past year.
Our experts are here to guide you through these property investment opportunities and help you find your ideal home in South Africa’s hotspots. Contact us now. For more insights and tips from Seeff, explore our blog on how to recognise property investment opportunities.
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