Bond originators play a vital role under tougher economic conditions

April property statistics from ooba, South Africa’s largest bond originator, indicate a significant slowdown in the year-on-year growth of the average property purchase.  

With an increase of only 2.6% since April 2015, average house price inflation has shown negative real growth against the current inflation rate of 6.3%. 

The First-Time Buyers Purchase Price mirrors this trend, with annual growth of only 2.8%.

Rhys Dyer, CEO of ooba, says: “The slowing growth in property prices is a symptom of deteriorating residential property demand. Consumer confidence is waning in the face of South Africa’s poor economic growth, high inflationary pressures and increasingly expensive credit due to rising interest rates and higher funding costs for banks.

Dyer points out an emerging trend towards homebuyers entering the market with some form of deposit. The ratio of homebuyers applying for finance without access to a deposit was 36% in April and 37% in March, compared to 48% in April 2015. 

The April statistics show that banks have increased their average pricing from 0.27% above prime in April 2015, to 0.43% above prime in April 2016, which coupled with interest rate increases, further impacts consumer affordability.

Dyer adds: “First-time Buyers are showing less activity in the market. Six months ago 54% of all our home loan applicants were First-time Buyers compared to only 51% in April this year. This probably explains why the average age of buyers has increased by one year to 38 years old for the first time since January 2009. The average age of First-time Buyers has also increased year-on year by one year to 34 years old.” 

Says Dyer: “Our statistics show bond approval rates are down by -3.9% year-on-year, although there is a 0.8% increase month-on-month. Increasingly expensive credit and consumer affordability constraints naturally contribute to this higher decline ratio. By using the services of a bond originator, prospective buyers greatly increase their chances of obtaining successful bond approval with the most affordable terms, given current turbulent economic times,” concludes Dyer.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Nov 2017
      Property valued at approximately R1 billion is on High Street Auctions’ sales floor during the month of November, including the much-anticipated sale of the Tshwane Mayoral Residence and the land occupied by one of South Africa’s oldest operating gold mines.
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us