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May results from ooba show continued activity from first time home buyers

The May statistics recorded by ooba, South Africa’s biggest bond originator, show that the trend of positive growth in the property market continues.
 
The Average Purchase Price recorded by ooba in May was R947 086, which reflects a growth of 3.7% year- on-year and is unchanged month-on-month. The First Time Buyer’s Purchase Price showed a very healthy year-on-year increase of 8.6%, with 51.3% of ooba’s bond applications in May coming from first-time buyers, indicating that this buyer segment remains a key driver of the current market.
 
The Average Approved Bond Size, at R818 955, showed a year-on-year growth of 8% and a month-on-month growth of 1.9%. This increase in average bond size was driven by a sharp decrease in the average deposit –
being R128 131 – which is 13.5% of the Average Purchase Price, down 20.6% year-on-year and 10.6% month- on-month.
 
“The reduction in the average deposit requirement is a positive sign of lender confidence in the market,” says Rhys Dyer, ooba CEO.
 
“ooba’s approval rate in May remained high at 72.1%, indicating that ooba continues to secure approval for more than seven out of ten home loans that it processes. With average approval rates from banks only slightly above 50%, the importance of ensuring that you approach multiple lenders to ensure you access the best terms for credit are very apparent,” says Dyer.

 

Full oobarometer analysis:

Indicator

May

2014

May

2013

Change year-on year

(May 14 vs May 13)

Apr

2014

Change month-

on-month

(May 14 to Apr 14)

Average purchase price

947,086

913,500

3.7%

947,189

-0.0%

Average purchase price

of  first time buyer

733,344

675,116

8.6%

743,053

-1.3%

Average approved

bond size

818,955

758,186

8.0%

803,811

1.9%

Average deposit (as %

of purchase price)

13.5%

(R128,131)

17.0%

(R155,314)

-20.6%

15.1%

(R143,378)

-10.6%

Average age of applicant

37

37

No Change

37

No Change

Average initial decline ratio (first bank decline)

47.5%

48.5%

-1.0%

46.0%

1.5%

Ratio of applications declined by one lender but approved by another

27.0%

25.8%

1.2%

27.6%

-0.6%

 

Effective approval ratio

 

65.3%

 

64.0%

 

1.3%

 

66.7%

 

-1.4%

 

 

 

 

 

 




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