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Moderate growth in property prices in September

There was a moderate growth in house prices for the month of September 2012, according to the latest statistics from ooba, South Africa’s biggest bond originator.  

The average house price for September was R876,717, up 4.5% year on year and 4.9% month on month.

First-time-buyer statistics also showed moderate growth. The average purchase price for first-time buyers was up 6.7% from R619,920 in September 2011 to R661,159 in September 2012.  Month on month, there was a 0.2% growth in the average purchase price for first-time buyers

Of ooba’s total intake of bond applications in September, 54.0% were from first-time buyers, which is 1.9% up year on year. This is the highest first-time buyer intake ooba has recorded to date and indicates the increased demand for property in this market, which is translating into continued year-on-year property price growth.

ooba continues to report significant increases in the value of home loan applications and approvals. The value of its home loan approvals was up 29% year on year in September.
“The September numbers reinforce the recent trend of continued marginal price growth, underpinned by increasing levels of activity and new entrants into the market,” says Saul Geffen, CEO of ooba. “We expect the short-term trend to continue in this vein.”

The average home loan deposit increased by 4.7% from R142,885 in September 2011 to R156,172 in September 2012, which is 17.8% of the purchase price.  Month on month, the average home loan deposit increased 56.1%. “The large month-on-month increase in the average home loan deposit is largely due to recent changes in bank lending policies particularly favoring loans with at least a 10% or more deposit,” says Geffen.

Although the initial decline ratio increased 2.1% to 48.0% in September, the percentage of applications that are declined by one bank but approved by another improved by 4.9% to 27.4% in September this year resulting in ooba’s effective approval rate being 65.2% of applications, up from 64.4% last year.

ooba’s trailing approval rate, which takes into account loans approved after month-end is currently 70.5%, translating into seven out of every ten home loan applications originated through ooba being approved.

The average approved bond size is showing a year-on-year increase of 3.6% to R720, 545 in September but a month-on-month decrease of 2.7%

Full oobarometer analysis:

Indicator

Sep

2012

Sep

2011

Change yr on yr

(Sep 12 vs Sep 11)

Aug

2012

Change month

on month

(Sep 12 to Aug 12)

Avg purchase price

876,717

838,645

4.5%

836,055

4.9%

Avg purchase price

of  first time buyer

661,159

619,920

6.7%

659,885

0.2%

Avg approved bond size

720,545

695,760

3.6%

740,659

-2.7%

Avg deposit (as % of purchase price)

17.8%

(R156,172)

17.0%

(R142,885)

4.7%

11.4%

(R95,396)

56.1%

Avg age of applicant

36

37

1 Year Younger

37

1 Year Younger

Avg initial decline ratio

(first bank decline)

48.0%

45.9%

2.10%

46.6%

1.4%

Ratio of applications declined by one lender but approved by another

27.4%

22.5%

4.9%

25.8%

1.6%

Effective approval ratio

65.2%

64.4%

0.8%

65.4%

-0.2%




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