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Property values on the rise

The average house price reached R894,510 in January 2013, up 5.2% from R850,589 in January 2012. Month on month, the average house price increased 3.4% from R865,164 in December 2012, reports ooba, one of the largest  bond originators in the country.

“The property market is gaining confidence and we expect property prices will continue to show positive nominal price growth for the year ahead,” says Rhys Dyer, ooba COO.

First time home buyer activity continues to drive the market, with over 51% of ooba’s applicants in January being first time home buyers.  The average house price for first-time buyers was up 5.5% year on year to R686,452 and up 3.2% month on month to R665,167.

Despite the high number of first time homebuyers, the average home loan deposit dropped 4.5% year on year and 5.7% month on month to R133,805, representing 15% of the average purchase price.

The average initial bank decline ratio decreased 4.3% year on year to 46.0% in January and the percentage of applications that were declined by one bank but approved by another improved significantly by 5.0% to 25.5%.

“That means one in four applications would have been declined had they not been originated to more than one lender,” says Dyer.  

The market conditions are supported by the lower interest rate environment coupled with subdued property price inflation and improved lending policies, says Dyer.

He expects the current environment to persist for 2013.

Full oobarometer analysis:
IndicatorJan
2013
Jan
2012
Change yr on yr
(Jan 13 vs Jan 12)
Dec
2012
Change month
on month
(Jan 13 to Dec 12)
Avg purchase price894,510850,5895.2%865,1643.4%
Avg purchase price
of first time buyer
686,452650,5745.5%665,1673.2%
Avg approved bond size760,705717,3456.0%727,8744.5%

Avg deposit (as % of purchase price)
15.0%(R133,805)15.7%
(R133,244)
-4.5%15.9%
(R137,290)
-5.7%
Avg age of applicant3737No Change37No Change
Avg initial decline ratio
(first bank decline)
46.0%50.3%-4.3%46.0%0.0%

Ratio of applications declined by one lender but approved by another
25.5%20.5%5.0%23.2%2.3%
Effective approval ratio65.7%60.0%5.7%64.7%1.0%



(Moneyweb)


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