select
|

First-time buyers to drive moderate house price growth and tougher lending criteria in the property market in 2013

In 2013, the property market is expected to show moderate growth, and prospective buyers would do well to have a deposit to bring to the table, says ooba, South Africa's biggest bond originator.

"House price growth is expected to continue to show moderate growth during 2013, with significant activity continuing in the first-time buyers market, says Saul Geffen, ooba CEO.
In 2012, first time buyers averaged at 52.7% of home loan applications and a record 54% was recorded in September 2012.

The average nominal house price recorded by the oobarometer in the 12 months to December 2012 grew 3.9% year on year, from R830,641 in 2011 to an average of R862,940 in 2012.
"Both the global and the domestic economy remains under significant pressure, household debt remains at a high level and nominal house prices continue to grow at a muted pace," explains Geffen. "We anticipate that lenders will continue to adopt cautious lending practices during 2013."

The buyer's market is expected to persist in 2013. "Potential buyers should ensure that they have the ability to access a deposit as lenders continue to fine tune credit policies with a focus on loans below 90% loan-to-value," says Geffen.

Towards the end of 2012, ooba also recorded an increase in buy-to-let applications, which Geffen says could be influenced by the increasing rental yields recently reported by Tenant Profile Network Credit Bureau and investors' improved perception of future long term property price growth. "Given the prevailing market conditions, this trend looks set to continue into 2013," he says.

Despite the moderate house price growth, ooba reported record growth in home loan approvals in 2012. The bond originator's home loan approvals reached a new high in November following its previous record set in October. The value of monthly home loans approved through ooba in November was up by 313% over January 2009 which was the lowest month during the property market crash and ensuing financial crisis.

For the 11-month period January to November 2012, ooba's approvals were up 147% over the same period in 2009. The value of home loans approved through ooba in December 2012 was up 49% on December 2011, while November and October were up 30% and 47% respectively on the prior year.

"It's gratifying to report this kind of growth given the extremely tough few years the industry has experienced," says Saul Geffen, ooba CEO. "The growth has been driven by a combination of ooba's increased market share, as well as the improved property market and lending conditions."

ooba has doubled its overall market share since the beginning of the crisis five years ago, based on market share reports provided by ooba's major lending partners. ooba originates more than 20% of all new residential home loans in SA.

Geffen also attributes the growth to the value proposition that mortgage originators offer consumers. "One in every five homebuyers use ooba to secure their home finance. Consumers understand that in today's tough lending environment, using a mortgage originator significantly enhances the chances of securing home loan approval and on competitive terms," he says.
ooba currently obtains approval for 71% of all home loan applications it processes, which compares favourably with the average bank approval rate of only 52% across the major lenders. "This means homebuyers using ooba have on average a 36% better chance of securing home loan approval."

He says that the market conditions are being driven by the low interest rate environment coupled with subdued property price inflation and improved lending conditions. He expects the current environment to persist into 2013.

The bottom line in 2013: If you're a seller, price your property realistically and be prepared to negotiate. If you're a buyer, line up a deposit, shop around for a bargain and use an expert bond originator for your best chance to get your home loan approved.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 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.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK