MILD PROPERTY PRICE GROWTH AND IMPROVED LENDER CONFIDENCE IN SEPTEMBER
Category News
The Average Purchase Price recorded by South Africa's biggest home loan experts ooba in September, was R896,258, up 2.2% on R876,717 recorded in September 2012, although marginally down on the R905,200 from the previous month. The Average Purchase Price for First-Time home buyers was R674,590, up 2% year on year.
According to ooba’s latest statistics, the Average Deposit recorded in September, at R126,630, is 14.1% of the purchase price, down from 17.9% recorded in September 2012 and down from 15.0% in the previous month.
In September, 53.7% of ooba’s total bond applications were from first-time buyers, which is similar to the ratio of 53.9% recorded in September 2012, but 2.6% higher month on month. On average first-time buyers are putting down an 11% deposit on their new homes.
“The first-time buyer market is continuing to be robust, with almost 54% of our home loan applications coming from this segment,” says Dyer. “If you take into account the relatively low average deposit of 11%, you can see that not only is this market growing, but that lenders are giving this market reasonable access to credit. Importantly however, statistics continue to show the bigger your deposit, the greater your chances of securing home finance and a better interest rate.”
At 47.2%, the Initial Decline Ratio, which shows the proportion of applications rejected by the first lender the application is submitted to, is down year on year by 0.8% and month on month by 1.2%. At the same time, the Ratio of Applications Declined by One Lender, Granted by Another has increased by 1.5% year on year and 0.1% month on month to 28.9%.
ooba’s effective bank approval rate in September was 66.4%. This is up on the 65.5% achieved in August 2013, and 65.2% in September 2012.
There are a number of indicators that demonstrate banks improved appetite for extending credit for home loans. These include:
- Lower average deposits, down by 21.2% year on year
- Lower initial bank decline ratio of 47.2%
- An increased percentage of applications declined by one lender and then granted by another of 28.9%
ooba’s increased effective approval rate to 66.4%. In addition, ooba’s trailing effective approval rate, which takes into account approvals that come through after month-end, is 75.3% – up year on year by 7%. This indicates that over three quarters of loan applications processed through ooba are now being approved.
“With one of the highest approval rates in the market, ooba continues to prove that using a bond originator gives you a better chance of getting your home loan approved, in the shortest possible time at no additional cost,” says Dyer.
Author: Jawitz Website
