“If you rent, you’re just paying someone else’s mortgage.”
“The most important thing is to just get onto the property ladder as quickly as you can.”
“Buy the biggest home you can afford. You’ll grow into it in time.”
When I was growing up, the major (in fact, only) piece of financial advice that adults drilled into me was that it’s absolutely crucial to try to buy your first house as quickly as you can. More than anything else, buying a house is what made you an adult. And I, with my deep distaste for both mountains of admin and home maintenance, always felt stressed that I wasn’t getting onto that fabled property ladder fast enough.
I'm not the only one. South Africans are buying their first house later than ever before, and statistics from BetterBond show that the average age of first-time home buyers has risen from 24 to 36 over the past 20 years.
The reasons for this aren’t that mysterious: we’re facing a youth unemployment crisis and the economy’s been in stagnation for a decade. Most young people are struggling to find their first real paying jobs, let alone save up for a home loan deposit. And changing global patterns of marriage and childbearing likely play a role, too.
But maybe - despite all the hand-wringing - the fact my generation is waiting longer to set down our roots isn’t such a bad thing for our finances.
Despite all the conventional wisdom we hear from our uncles around the braai, buying a house in South Africa has actually been a pretty terrible investment for most people, for many years. In fact, data from the FNB Property Barometer shows that the average house in South Africa has actually lost value against inflation for most of the past decade. So, if you’re planning to sell your house one day and make a fat profit to fund your retirement… then, sorry, you might need a different plan.
(Now, I’m talking here about just buying your own house to live in. Obviously, some people do really well through property investing: usually because they treat it like a side-business, and do a lot of maths and research and develop expertise about the residential property market. And some people just get lucky.)
But the other compelling financial reason to buy a house isn’t to think of it as an investment (something you plan to make a profit on when you sell it), but to think of it as a cost saving tool. Usually, when you first buy a house, the costs of owning that house every month are higher than if you were renting the same place. But the costs tend to stay more-or-less the same, while the costs of renting rise every year. And eventually, having owned the house works out cheaper than having rented it.
The thing is, the average person needs to live in one house for at least nine years before that happens.
That’s because the costs of buying and selling houses in South Africa is extremely expensive. You can run the maths on your own situation by playing with Jason Coomer’s excellent Buy vs. Rent calculator.
The average employed South African only stays in a job for about four years. Nine years is a long, long time for a young person who’s still trying to figure out their life and their career and their relationships to commit to being in one house.
So maybe, the fact that young people are waiting a little bit longer before they buy their first home isn’t such a terrible thing, after all.
Take a listen to this week’s episode of the Like a F-cking Grownup podcast, where we interview economist Jason Coomer about the maths of home ownership, talk to Xola Feni, a 20-something from Cape Town about why he just bought his first house, and get some tips from our very own Kathryn Kotze for negotiating better rental contracts, for those of you who feel like you’re aren’t quite ready to take the home ownership plunge.
While we're talking about figuring out where you want to live, I wanted to tell you guys why I've decided to move to the U.K. And no, it's not for the amazing weather. 😉
My Mum went blind in her 40s, from a degenerative disease called Macular Degeneration. Being blind isn't the worst thing in the world: my Mum has been a total goddamn inspiration in continuing to work and live a full life. Plus, you have a great excuse to take your dog everywhere! But sometimes it's also really hard, and it's especially hard to be blind in a country like South Africa, where most cities aren't really designed to be navigated independently by people with disabilities.
I've known, since I was a teenager, that there was a good chance I'll go blind at some point in my life, because Macular Degeneration is largely genetic. I didn't want to have the test to see if I had the genes for it, because it felt like there was nothing I could do about it anyway, so it was better not to know. So I made all of my future plans under a sort of "Schroedinger's Blindness" veil: simultaneously assuming I will and will not go blind. But mostly just taking the tried-and-tested 100% fool-proof Sam strategy of NEVER THINKING ABOUT IT. 🙉
About a year ago, I realised that there actually is a lot of stuff that I can do to prepare for going blind, if it turns out that I have the bad genes. I can start learning Braille. I can finally figure out how to use the voice controls on my phone. I can move to a place that has better social support for blindness. I can trap a wild parrot and teach it how to talk in a John Oliver accent so it can live on my shoulder and tell me when I'm about to bump into something.
Generally, I can build the type of life that can accommodate a disability better.
So I was brave! And I took the test! And I found out that yup, I do indeed have those sneaky blindness genes. Which means that one day I probably, but not definitely, will lose my vision. And I was sad about that result, but also kind of relieved. Because now I know. And now I can do something about it.
The U.K. is cold and it's wet and the food is awful, but it's a country that has excellent social support for blind people, so the chances of me being able to live an independent life there are better than here. And it's close enough to home that I can come back often and see my friends and my family. I'm extraordinarily lucky that I have a partner who's willing to come with me, and that I qualify for a visa, and that I can afford to re-locate myself (AND my asshole cat). Few people are so lucky.
I'm heartbroken about leaving South Africa. I have nothing but optimism for this country's future, and I believe that the grass is greenest where you water it. I'll be back to visit often. But I'm also excited about a new adventure 🤠.
This is a big ol' world, and I can't wait to see more of it, while I can.
Wishing you bravery and travel and parrots and smart housing decisions!
Your friend Sam
UPDATES FROM SAM-LAND
- 🦓 The first 10 episodes of Team Jay - the cartoon series about a magical zebra I worked on with Juventus and Sunrise Productions last year - are now available on YouTube! Grab your favourite 4-6 year old and have a watch :) I wrote the episodes "Seeing Double" and "Team of One", but they are all sweet and hilarious and you should watch them all.
- 🖥 Speaking of YouTube, I've experimentally loaded our Fitness episode up there to see if more people discover it there than on the podcast platforms. What do you think, gang? Is it worth it?
- ✒️ Please don't ask me how NaNoWriMo is going (BADLY. It's going BADLY.)