Millennials are the future home buying force. However, this younger generation, who are 30 years old and under, have some challenges to face in the current market.

Many Millennials are in the process of starting their careers and have large student debt that they need to pay off. As a result, it may take some time for them to get on their feet and build up the necessary savings to purchase their first property. For some, the idea of saving for a home while paying rent and making student loan payments is daunting, to say the least. Although it might be impossible for some at this stage, for others it could be a matter of having the discipline to make certain sacrifices and set aside money rather than spend it.

For the majority of Millennials, as with most first-time buyers, the biggest hurdle to overcome is getting together the money for the deposit.


According to Betterlife bond application statistics, the average deposit percentage required by first-time buyers is around 21.17%. Considering that the average purchase price for first-time buyers is around R860 000, that equates to a deposit of approximately R182 000 – not a small feat.

The best way to accomplish big goals is by starting small and remaining consistent. While the thought of saving an amount as large as R182 000 may seem like a massive deed, it can be achieved by breaking the amount down into smaller, more manageable goals. Even if it is a matter of starting out setting aside small initial amounts, it is important to get started and remain consistent, putting money away every month. 

A good way to save

In an ideal situation, the best way to set a monthly savings goal is to find the difference between your current rental payment and the estimated bond repayment. The amount should include other monthly costs such as bond insurance, homeowner insurance, rates and levies. If possible, the difference should be set aside as savings. The benefits of this strategy are twofold.  Firstly it will build up your savings, and secondly, it will help you to adjust to the anticipated cost of owning a property.

Using this method of savings will provide you with some insight into whether you are financially ready to own a property and what they can afford. If you can meet the savings goal consistently, then you know you are in a position to purchase a property within your budget. If you are struggling to meet the monthly savings goals, you might need to adjust your housing budget and bring it in line with what you can realistically afford.

A visual dream board with a picture of the type of house you want will help to keep you motivated and on track. It is important to be reminded of why you are doing without certain things and putting away savings. A visual image will be a daily reminder of the end goal.

Finding the savings

The first place to look for savings is the property you are renting. If the rental is more than 30% of your monthly income, then it is too much. While it might mean scaling back, consider moving to a more affordable rental property. It doesn’t make sense to spend more money on a rental home if it is holding you back from owning property.

Finding more savings will require you to assess their current spending and scrutinise every expense. Money can be saved by making a packed lunch every day, instead of eating out. Other ways of saving include cancelling that gym contract and finding ways to exercise for free or travelling to and from work in a lift club. There are numerous ways to cut back on spending - it just takes some creativity. 

The right time

There is the concern that while you are building up savings, rising home prices will make it more and more difficult to get onto the property ladder. While there is merit to the concern, it is best not to rush into buying property until you are completely ready. Even if it means paying a slightly higher price, it is best to have a solid financial foundation and be confident that you can make the commitment that home ownership requires.