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Property prices shows 5.6% year-on-year growth

According to the latest statistics released by bond originator ooba, property prices showed positive year-on-year growth of 5.6% in April 2012. April was the sixth consecutive month of positive year-on-year property price growth.

The April oobarometer price index reveals that the average house price rose to R870 070 from R823 483 a year earlier. In addition to this growth, the average purchase price of the first-time buyer continues its upward trajectory, showing year-on-year growth of 8.2% to R676 837, from R625 252 in April 2011.

The growth in the first-time buyer purchase price seems to be supported by sustained first-time buyer activity. Of the April applications, 50.9% consisted of first-time buyers. This is in comparison with the 47.7% recorded in March 2012. April was also the twelfth consecutive month of positive year-on-year property price growth for first-time buyers.

The average approved home loan size is also showing both a year-on-year increase of 3.5% and a month-on-month increase of 1.3%.

The consistent property price growth and the improved bank approval rates suggests improved confidence in the property market; this sentiment is underpinned by higher home loan approval rates.

The ratio of applications declined by one lender but granted by another for April 2012, is showing a significant year-on-year increase to 26.7% of all declined deals. Essentially 27% of all declined deals are being approved by other lenders and this translates into an effective approval ratio of 67% of all applications, which is the highest ratio of approvals ooba has recorded for over three years.

ooba also reported 45% growth in its approved home loans for April 2012 over the corresponding period in the prior year.

Full oobarometer analysis:

Indicator

April

2012

April

2011

Change yr on yr

(Apr 12 vs Apr 11)

March

2012

Change month

on month

(Apr 12 to Mar 12)

Avg purchase price

870,070

823,483

5.6%

874,228

-0.5%

Avg purchase price

of  first time buyer

676,837

625,252

8.2%

629,789

7.5%

Avg approved bond size

740,751

715,578

3.5%

730,904

1.3%

Avg deposit (as % of purchase price)

14.9%

(R129,319)

13.1%

(R107,905)

13.7%

16.4%

(R143,324)

-9.1%

Avg age of applicant

37

37

No Change

37

No Change

Avg initial decline ratio

(first bank decline)

45.1%

45.4%

-0.3%

47.0%

-1.9%

Ratio of applications declined by one lender but approved by another

26.7%

21.6%

5.1%

24.3%

2.4%

Effective approval ratio

66.9%

64.4%

2.5%

64.4%

2.5%




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