First-time buyers back in force

Sentiment in the residential property market continues to improve and drive up the demand for home ownership, even in the face of rising living expenses and slow economic growth that is keeping the lid on salary and wage increases.
That’s the word from Shaun Rademeyer, CEO of SA’s biggest mortgage originator BetterBond Homeloans, who says the clearest indication of growing consumer confidence in the market now is the steady increase in the percentage of home loan applications coming from first-time homebuyers.
“Such buyers are usually the first to ‘opt out’ of the market when purchase conditions become unfavourable - by staying on with their parents or continuing to rent - but our statistics show that first-time buyer interest has recovered strongly since March, thanks largely to a drop in the deposit requirements for such buyers and an increase in the percentage of loans being granted for 100% of the property purchase price.”
Affordability has also been increased, he notes, by the fact that the average home price for first-time buyers has also shown little movement in the past 12 months. (See table).
The BetterBond group statistics, which cover a quarter of all residential mortgage bonds being registered in the Deeds Office and include applications to, and bond grants from, all the major lending banks in SA, show that applications from first-time buyers accounted for 44% of the total in the three months to end-August, compared to 37% in the previous three months.
They also show that the percentage of 100% home loans approved rose to 36,2% in August compared to 30,4% of the total in August 2012, and that the average percentage of the home purchase price required as a deposit by first-time buyers who do not secure 100% home loans now stands at 8,8% - compared to 13% a year ago.
Meanwhile, BetterBond continues to achieve approval for close to three out of every four applications it receives (73%), thanks to its in-depth knowledge of the process of applying for a bond coupled with the ability to submit to other banks should the applicant’s own bank not provide the best deal. 
“Indeed,” says Rademeyer, “the statistics show that over the past year, 55% of applications only succeeded on submission to a second or third lender – so prospective borrowers really do have a much better chance of obtaining a home loan when they apply through us than if they try to organise things themselves.
“In addition, the average approved bond amount achieved by BetterBond is now 8,4% higher than it was a year ago at R788 018 – which is also its highest level in two years.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
    • 20 Feb 2018
      A major shift in the ageing paradigm has precipitated an equally dramatic transformation in the retirement sector, with modern accommodation options worlds away from the conventional model.
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us