South African youth are pushing to own homes despite rising living costs, limited incomes, and economic uncertainty, with the average approval of R1.2-million for a home loan.
This is revealed in the Standard Bank inaugural Youth Barometer Report, which highlighted how South Africans aged 18 to 35 are managing their finances while also facing high youth unemployment.
Toni Anderson, head of home service at Standard Bank, said about 60% of young buyers receive loans at 100% loan-to-value (LTV) or more, and 70% are approved for 20-year terms.
Affordability realities
“In comparison, older buyers are approved for larger loans averaging close to R1.5 million, with 45% approved at LTVs of 100% and more and 75% approved for a term of 20 years.
“This reflects the affordability realities facing younger buyers. Higher LTVs suggest lower deposits, while longer loan terms are likely used to manage monthly instalments,” said Anderson.
She said this younger group of consumers were stretching to get onto the property ladder. But they remain within safe lending thresholds.
As such, Standard Bank has responded by offering first-time buyers loans of up to 108% based on risk assessment. Thus helping them cover upfront costs.
Many young people face irregular or low-paying work, making long-term financial planning a challenge. Yet, despite limited employment opportunities, a growing number are managing to secure home loans and meet repayments.
The report also revealed that young buyers are also spending a greater share of their income on home loan repayments compared to older customers. This is shown by the Instalment-to-Income (ITI) ratio.
The ITI measures how much of a person’s income goes towards paying off their loan.
Youth vs older buyers
Among youth buyers, 74% keep this ratio at 30% or below, compared to 82% of older buyers.
Anderson explained that an ITI above 30% may show tight financial margins. This can be risky when interest rates rise. But it also reflects a strong commitment to financial goals.
“Affordable housing is a key enabler of youth homeownership. And First Home Finance, the government’s subsidy programme for qualifying buyers, plays a critical role. Most of these take-ups are from youth over the age of 30, predominantly located in Gauteng.
Growing awareness of subsidy
“This suggests a growing awareness of and demand for government support among young buyers. While take-up is modest, it presents a valuable lever to support affordability, especially in the lower- to mid-income segments. Continued education on subsidy availability and eligibility could unlock even greater uptake in the future,” said Anderson.
Tshiamo Molanda, Head of Youth & Mass Market Segments at Standard Bank, spoke on the report. She said it offers a deeper look into how young South Africans manage their everyday finances.
“What emerges is not a story of recklessness or short-termism. But a portrait of resilience and resourcefulness. These are pragmatic decision-makers, conscious of their limits but unwilling to be defined by them,” Molanda said.
Despite confidence that more young people are breaking into the middle-class market faster than usual, she said the research did not break down the racial classes.
