There was a moderate growth in house prices for the month of September 2012, according to the latest statistics from ooba, South Africa’s biggest bond originator. The average house price for September was R876,717, up 4.5 percent (-0.5 percent when accounting for inflation, currently at five percent) year on year and 4.9 percent month on month.
First-time-buyer statistics also showed moderate growth. The average purchase price for first-time buyers was up 6.7 percent from R619,920 in September 2011 to R661,159 in September 2012. Month on month, there was a 0.2 percent growth in the average purchase price for first-time buyers.
Of ooba’s total intake of bond applications in September, 54.0 percent were from first-time buyers, which is 1.9 percent up year on year. This is the highest first-time buyer intake ooba has recorded to date and indicates the increased demand for property in this market, which is translating into continued year-on-year property price growth.
ooba continues to report significant increases in the value of home loan applications and approvals. The value of its home loan approvals was up 29 percent year on year in September.
“The September numbers reinforce the recent trend of continued marginal price growth, underpinned by increasing levels of activity and new entrants into the market,” says Saul Geffen, CEO of ooba. “We expect the short-term trend to continue in this vein.”
The average home loan deposit increased by 4.7 percent from R142,885 in September 2011 to R156,172 in September 2012, which is 17.8 percent of the purchase price. Month on month, the average home loan deposit increased 56.1 percent. “The large month-on-month increase in the average home loan deposit is largely due to recent changes in bank lending policies particularly favoring loans with at least a 10 percent or more deposit,” says Geffen.
Although the initial decline ratio increased 2.1 percent to 48.0 percent in September, the percentage of applications that are declined by one bank but approved by another improved by 4.9 percent to 27.4 percent in September this year resulting in ooba’s effective approval rate being 65.2 percent of applications, up from 64.4 percent last year.
ooba’s trailing approval rate, which takes into account loans approved after month-end is currently 70.5 percent, translating into seven out of every ten home loan applications originated through ooba being approved.
The average approved bond size is showing a year-on-year increase of 3.6 percent to R720, 545 in September but a month-on-month decrease of 2.7 percent.