select
|

Buyers are still keen, despite rate increases

The latest statistics from BetterBond Home Loans, SA’s leading mortgage origination group, show that the number of home loan applications received in July was actually 2% higher than the number received in July last year – despite the two interest rate increases that have been announced this year.
 
“This speaks to the ongoing strong demand for housing as the backlog built up after the 2008/ 09 recession continues to spill into the market,” says BetterBond CEO Shaun Rademeyer.
 
“There is more evidence for this as home prices continue to increase in the face of dwindling supply. According to our statistics, the average home price showed a year-on-year increase of 10,75% in July, when it reached R906 407. In the same period, the average home price paid by first-time buyers rose 7,63% to R639 071.”
 
The Betterbond figures also show, he says, that the total number of bonds approved in the 12 months to end-July was 3,34% higher than in the previous 12 months, and that the total value of bond approvals showed a year-on-year increase of 6,46% at end-July to some R38,8bn.
 
In addition, the average approved bond size has increased by almost 3% in the past 12 months to R755 586, and the average bond approved for first-time buyers has increased by almost 1% to R585 287.
 
And at the same time, the average percentage of purchase price required as a deposit has shown a 3,62% decline year-on-year, while the average percentage of purchase price required by first-time buyers has declined by 7,17%.
 
“Nevertheless, we are expecting to see some contraction in the market in the remaining months of this year as affordability issues begin to bite,especially if there are additional interest rate increases as predicted.”
 
Such increases obviously make it more difficult to qualify for home loans in terms of the household disposable income required by the banks, says Rademeyer, and also tend to make consumers wary of committing to any new debt such as a home loan.
 
“For now, though, it is worth noting that the number of applications initially declined by one bank but subsequently approved by others showed a 4,34% year-on-year increase in July – and that the number of applications declined by the borrowers’ own banks actually rose 7,88% in the same period.
 
“It is thus becoming even more important for buyers to work with a mortgage originator that will motivate individual applications and can submit them to multiple banks in order to secure the best result for the prospective homebuyer.”
 
BetterBond’s overall bond approval ratio in the past 12 months has been 75%, and the total value of applications “rescued” after initially being declined was R18,44bn”.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    • 16 Jan 2018
      The start of the new year is symbolic of new beginnings. A good time to take stock of one’s possessions as well as how necessary they actually are. However, seeing as the process may appear daunting – a plan goes a long way.
    • 16 Jan 2018
      The Western Cape is still in the throes of a severe drought and many households have to adjust the way they use and save water. It is a little more complicated in sectional title schemes, however, as it is not that easy to implement grey water systems for multiple users and it is also difficult to monitor water usage accurately if there are no separate water meters
    • 15 Jan 2018
      In ideal rental situations, when a lease is signed the tenant will stay for the full duration of his lease without any complications and the landlord will uphold his obligations, creating a win-win situation for tenant and landlord.
        
    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