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Fifth consecutive month of positive home price growth

Property prices show a positive year-on-year growth of 1.6% in March.

According to the latest statistics released by ooba – South Africa’s leading bond originator - property prices showed positive year-on-year growth of 1.6% in March, as well as positive month-on-month growth of 0.7%, making this the fifth consecutive month ooba has recorded an increase in residential property prices.

The March oobarometer price index reveals that the average house price rose to R874 228 from R860 492 a year earlier. The average purchase price amongst first time buyers continues to show a year-on-year increase of 1.1% to R629 789 from R623 179 recorded in March 2011.
According to Saul Geffen, CEO of ooba, the value of home loan approvals for March was up 49% year-on-year. This is the company’s best performance since April 2008, 4 years ago.

The average approved bond size showed a nominal increase of 0.1% to R730 904 from R729 876 a year ago, while the average deposit increased by 7.9% to R143 324 from R130 616 in March 2011. The average deposit is now equivalent to 16.4% of the purchase price.

The percentage of First Time Buyers dropped in March to 47.7% of ooba’s applications received, which is the lowest level it has been since October 2010.   Geffen says that this may be attributed to an increased proportion of existing homebuyers who are entering the market as indicated by the recent significant increase in volume of transactions, and supported by more positive sentiment generally.

The initial bank decline ratio increased by 2.3% year-on-year to 47% but decreased 1.2% month-on-month in March. The ratio of applicants declined by one lender but approved by another increased 1.6% year-on-year to 24.3%. Geffen explains the month on month improvement in the effective approval rate can be attributed to certain banks easing their lending criteria towards the end of February.

The effective approval ratio showed a year-on-year decrease of 1.1% to 64.4% and a month-on-month increase of 1.6%.

Full oobarometer analysis:

Indicator

March

2012

March

2011

Change yr on yr

(Mar 12 vs Mar11)

February

2012

Change month

on month

(Mar 12 to Feb 12)

Avg purchase price

874,228

860,492

1.6%

868,174

0.7%

Avg purchase price

of  first time buyer

629,789

623,179

1.1%

663,092

-5.0%

Avg approved bond size

730,904

729,876

0.1%

738,835

-1.1%

Avg deposit (as % of purchase price)

16.4%

(R143,324)

15.2%

(R130,616)

7.9%

14.9%

(R129,339)

10.1%

Avg age of applicant

37

37

No change

37

No change

Avg initial decline ratio

(first bank decline)

47.0%

44.7%

2.3%

48.2%

-1.2%

Ratio of applications declined by one lender but approved by another

24.3%

22.7%

1.6%

22.8%

1.5%

Effective approval ratio

64.4%

65.5%

-1.1%

62.8%

1.6%




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