More buyers with more money boost property market

The average home purchase price in SA increased by 5,6% in the 12 months to end-January to R930 000, according to the latest statistics from BetterBond Home Loans, SA’s leading mortgage origination group.
These figures also show that the average home loan granted during this period covered only 83% of the purchase price – meaning that most homebuyers still had to come up with a large sum of cash in order to complete their transactions.
“Fortunately, however, things have generally been much easier for first-time buyers,” says BetterBond CEO Shaun Rademeyer. “While the average first-time home price also increased in the past 12 months, to R651 000, the banks were in most cases prepared to finance about 91,5% of that.
“This meant that the average first-time buyer only had to save a deposit of around R55 000 – and that helped BetterBond to maintain an average bond approval ratio of 73% in the 12 months to end-January.”
In addition, the group’s statistics show, the lower deposit requirements also helped to ensure that about 41% of the 37 000 home loans formally granted through BetterBond in the past year went to first-time buyers – even though they only accounted for 28,5% of the total value of all the properties purchased with these loans.
“In the previous 12-month period, first-time buyers accounted for 43% of the formally granted loans and 30% of the total value of properties purchased, but given the fact that there were two interest rate increases in 2014 and that consumers also had to deal with steep fuel, food and utility cost increases, we think the picture is still very good for such buyers,” Rademeyer says.
“First-time buyers are generally young people with less ability to cope financially with rising interest rates and living costs, and they tend to give up on home purchases much more easily than repeat buyers. So the fact that so many of them stayed in the market during 2014 indicates the strength of demand in this sector – and bodes well for the future of the market as a whole as they outgrow their first homes and start to upgrade.”
Further encouraging signs for the residential property market in the coming 12 months, he says, are the fact that the total number of home loan applications submitted to the banks by BetterBond was 3,4% up year-on-year at the end of January, and that the global oil price decline will probably enable the Reserve Bank to delay any further interest rate increases until at least the second half of 2015.
“In short, there are currently more prospective buyers in the market, a greater percentage of whom are likely to be able to qualify for home loans.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
    • 20 Feb 2018
      A major shift in the ageing paradigm has precipitated an equally dramatic transformation in the retirement sector, with modern accommodation options worlds away from the conventional model.
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us