July property prices up

The year-on-year increase in property prices is continuing‚ especially for first-time buyers‚ with a simultaneous decline in the size of the deposit required - all of which are positive indicators for the residential property market‚ says bond originator Ooba.

Data released on Tuesday showed the average purchase price in July this year was R846‚863‚ up 3.1% from R821‚579 in July last year.

The average purchase price for first-time buyers showed a year-on-year increase for the 15th consecutive month‚ rising 7.8% from R609‚417 in July 2011 to R657‚069 in July 2012.

The month-on-month purchase price statistics do‚ however‚ indicate a trend of slowing growth in property prices‚ in line with slowing economic growth.

“Of our total intake of bond applications in July‚ 53% were from first-time buyers‚ a 5% increase from last year‚” said Rhys Dyer‚ chief operating officer of ooba.

“The sustained higher levels of first-time buyer activity are underpinning good year-on-year growth in property prices in the first-time buyer segments.”

Ooba’s statistics have continued to show a reduction in the average home loan deposit‚ down from 15.1% of the purchase price in July last year to 12.6% of the purchase price in July this year‚ and lower than the 15.0% of the purchase price recorded last month.

The reduction in deposits was a good indicator of bank credit appetite‚ reflecting improved access to finance for home buyers with limited deposits‚ Dyer said.

Ooba said a further indicator of easier credit conditions was the effective approval rate - the percentage of loan applications for which it obtained approval - which rose to 65.3% of applications‚ from 64.2% a year ago.

Dyer said the increase in the approval rate was driven by a healthy improvement in the percentage of applications that are declined by one bank but approved by another‚ up from 23.1% of applications last year to 27.6% this year‚ highlighting the importance of shopping around for finance.

These improved lending conditions continued to drive strong year-on-year value growth‚ with ooba reporting a 28% year-on-year increase in the value of its home loan applications and a 38% year-on-year increase in the value of home loan approvals in July‚ the best monthly performance recorded since early 2008.

“The decision by the MPC (the Reserve Bank’s monetary policy committee) to drop interest rates in July by a further 0.5 percentage points is likely to add further mild stimulus to the lending environment‚ improving the ability for home buyers to qualify for loans‚ especially in the active first-time home buyer space‚” Dyer said.

“This‚ coupled with the improvements in approval rates and average deposits‚ is likely to sustain the current higher levels of lending activity.”

(I-Net Bridge)

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Apr 2018
      The rental market is a cut-throat sector of the real estate market that waits for nobody. According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, first-time renters need to be fully prepared before they even start the process of looking for a place to rent in order to avoid the disappointment of losing out on their ideal property.
    • 19 Apr 2018
      Choosing to buy your first home instead of continuing to rent is a big decision that will usually take some time to put into action, but the sooner you can save up a sizeable deposit, the closer you will be to reaching your goal.
    • 18 Apr 2018
      Selling your home is no small task and as you will quickly find out, there are a lot of misconceptions about the process. Gerhard van der Linde, Seeff's MD in Pretoria East lists the top 5 misconceptions when you are selling your home.
    • 18 Apr 2018
      The Cape Town municipality is now installing water-management devices at properties that have been non-compliant with the new level 5 water restrictions and there are talks of fines between R5,000 and R10,000 for households that use too much water.
    • 17 Apr 2018
      The recent interest rate cut has stoked the coals in the first-time buyer’s market. At least for the next two months until the next interest rate announcement, homeowners are guaranteed lower monthly instalments than in the previous quarter. But, is it wise to take out a 100% bond just to enter the property market while interest rates are low?
    • 17 Apr 2018
      By the end of 2017, very few housing markets remained unaffected by the mounting pressure of the prevailing economy and political climate but some fared better than others, especially sought-after, well-situated suburbs like Parktown North that tick the top boxes on buyer’s wish lists.
    • 17 Apr 2018
      With urbanisation at its peak and population density in major cities reaching frustrating levels is it any wonder that more South Africans are choosing to move away from the chaos to a quieter life?
    • 16 Apr 2018
      When you are selling your home, you will have potential buyers coming to view it. During these times, you will need to ensure that each room of your home is clean and beautifully decorated.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us