select
|

Property market ends the year on a strong note

Property values have continued to grow in the past 12 months, with the average home price showing a year-on-year increase of just over 5% to R971 000 at the end of November, according to the latest statistics from BetterLife Home Loans, SA’s biggest mortgage originator.

“At the same time,” says CEO Shaun Rademeyer, “the average approved bond size has only increased by 4,6% to R804 000, which means that many buyers are now able to put down bigger deposits in order to secure their home loans.

“This is especially the case in the higher price categories, where the average deposit now ranges from at least 15% to as much as 40% of the purchase price. Our statistics show, for example, that the average deposit on homes costing R1,5m to R2,5m is R428 000.”

In addition, he notes, the figures reveal that the percentage of home loan applications that are being declined outright by the banks has dropped sharply in the past year from 30% to 25% - “which all adds up to indicate that prospective buyers generally have their finances in good order at the moment.”

The BetterLife Home Loans statistics, which represent 25% of all residential mortgage bonds being registered in the Deeds Office, also contain good news for first-time buyers. They show that while the average purchase price paid by first-time buyers rose 3% to R662 000 in the year to end-November, the average approved bond size in that period rose by 4,3% to R617 000.

“This saw the average deposit required by first-time buyers shrink by almost 12% to R45 000,” says Rademeyer, “which is a big boost for those who do not have existing homes to sell in order to help raise cash.

“What is more, some 38% of all home loans granted in the past year were for no-deposit or 100% loans – and most of these went to first-time buyers purchasing in the affordable price range up to around R500 000.”

This is very encouraging, he says, in a market that gets most of it impetus from demand at the lower end, and new owners then moving up the property ladder.

However, he cautions, the banks are by no means insensitive to the fact that rising living costs and the recent increase in interest rates are making it tougher for consumers to keep up with debt repayments.

“Credit granting criteria are thus likely to be strictly applied next year and prospective buyers may well find that they have to consider cheaper properties in order to qualify for loans. This is likely to put a damper on house price growth.”

 


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 24 Nov 2017
      Demand for secure estate living in Hout Bay has risen sharply in recent years, precipitating a spike in development with estate homes now accounting for 20.24% of the property landscape with the launch of an exclusive new gated development on 26 November adding 20 more units to the existing 1250 estate homes.
    • 24 Nov 2017
      There are some things that money can’t buy – spectacular views from Mouille Point to the V&A Waterfront and a trendy and lively neighbourhood that encapsulates the very best of the Cape Town lifestyle.
    • 24 Nov 2017
      Tshwane’s four-bedroom Mayoral mansion, nestled among ambassadorial residences in the upmarket suburb of Muckleneuk, fetched R5.1 million after spirited bidding at High Street Auctions’ final sale of the year.
    • 23 Nov 2017
      Reserve Bank Governor, Lesetja Kganyago, said that the Monetary Policy Committee had once again decided to let the interest rates remain unchanged with the repo rate at 6.75%, and the prime lending rate at 10.25%.
    • 23 Nov 2017
      As the holiday season approaches, most of us are counting the days until that year-end bonus hits our account. There’s nothing quite like a little bank balance booster to get us in the holiday spirit.
    • 23 Nov 2017
      The Adelphi Centre (now entitled “ARTEM") in Sea Point, Cape Town, is being extensively renovated, and once complete will offer an ultra-luxurious galleria style shopping centre unlike any other seen on the Atlantic Seaboard or in Cape Town.
    • 23 Nov 2017
      If you are looking to sell your home in today’s real estate market, there are certain things that you need to include both inside and outside your house. Today’s generation of home buyers is looking toward a more eco-friendly, energy and water conscious home, and if your house stands out then you are more likely to be able to sell it.
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK