The latest statistics released by ooba, South Africa's leading bond originator, show that June was the 14th consecutive month of positive year-on-year property price growth for first-time buyers, and the eighth consecutive month ooba has recorded an increase in residential property prices.
According to the June oobarometer price index, the average house price shows positive year-on-year growth of 6.1%, and a nominal month-on-month decline of 0.7%.
“This increase indicates that there is sustained demand for property, which is translating into higher property prices,” says Saul Geffen, CEO of ooba. “However, the month-on-month decline does indicate a tempering of the positive momentum.”
The average price of a house bought by a first-time buyer was R682,042 in that month, compared to R603,658 a year ago – an increase of 13%. Month on month, the growth was 5.7% on May's average first-time buyer house price of R645,458.
“For the month of June, 52% of our total intake of home loan applications was from first time buyers – up 3.8% year on year, indicating that there is continued appetite in this sector underpinned by improved access to finance.”
Further good news for first-time buyers is that while there was a slight increase in the initial bank decline ratio (1.1% higher year on year), the ratio of applications declined by one lender, granted by another shows a healthy year-on-year increase to 27.9% from 23.2%. “The year-on-year growth of applications that are initially declined but then approved by another lender highlights the benefits of using a mortgage originator to cast as wide a net as possible when applying for a home loan,” says Geffen.
The average approved bond size continued to show positive growth, up 4.5% to R733,833 from R702,438 a year ago, while the average deposit currently sits at 15% of the average house price.
The June average bank decline rate is 48.1%, down 1.1% from the prior year. The oobarometer shows that ooba's effective approval rate is up 1.4% year on year, at 65.3%. The trailing effective approval rate, which takes into account loans approved via ooba after month-end is 70.9%, meaning seven out of every 10 home loan applications are currently being approved through ooba.
The statistics also showed that 96% of home loan applications received by ooba in June were from buyers purchasing a primary residence, up from 89% in June 2009. This shows that the buy-to-let market continues to be sluggish despite the relatively cheap cost of raising financing.
Full oobarometer analysis:
| Indicator | Jun 2012 | Jun 2011 | Change yr on yr (Jun 12 vs Jun 11) | May 2012 | Change month on month (Jun 12 to May 12) |
| Avg purchase price | 863,122 | 813,811 | 6.1% | 869,088 | -0.7% |
| Avg purchase price of first time buyer | 682,042 | 603,658 | 13.0% | 645,458 | 5.7% |
| Avg approved bond size | 733,833 | 702,438 | 4.5% | 737,774 | -0.5% |
| Avg deposit (as % of purchase price) | 15.0% (R129,289) | 13.7% (R111,373) | 9.5% | 15.1% (R131,314) | -0.7% |
| Avg age of applicant | 37 | 37 | No Change | 37 | No Change |
| Avg initial decline ratio (first bank decline) | 48.1% | 47.0% | 1.1% | 47.9% | 0.2% |
| Ratio of applications declined by one lender but approved by another | 27.9% | 23.2% | 4.7% | 28.4% | -0.5% |
| Effective approval ratio | 65.3% | 63.9% | 1.4% | 65.7% | -0.4% |
Ends