Year-on-year, residential property prices declined by 4.4 percent in real terms (i.e. accounting for inflation currently at six percent) in March, according to the latest statistics released by bond originator ooba.
Month on month, this marks a nominal (i.e. not taking inflation into account) increase of 0.7 percent, making this the fifth consecutive month ooba has recorded a nominal increase in residential property prices.
The March oobarometer price index reveals that the average house price rose to R874 228 from R860 492 a year earlier. The average purchase price amongst first time buyers continues to show a year-on-year increase of 1.1 percent to R629 789 from R623 179 recorded in March 2011.
According to Saul Geffen, CEO of ooba, the value of home loan approvals for March was up 49 percent year-on-year. This is the company’s best performance since April 2008.
The average approved bond size showed a nominal increase of 0.1 percent to R730 904 from R729 876 a year ago, while the average deposit increased by 7.9 percent to R143 324 from R130 616 in March 2011. The average deposit is now equivalent to 16.4 percent of the purchase price.
The percentage of first time buyers dropped in March to 47.7 percent of ooba’s applications received, which is the lowest level it has been since October 2010. Geffen says that this may be attributed to an increased proportion of existing homebuyers who are entering the market as indicated by the recent significant increase in volume of transactions, and supported by more positive sentiment generally.
The initial bank decline ratio increased by 2.3 percent year-on-year to 47 percent but decreased 1.2 percent month-on-month in March. The ratio of applicants declined by one lender, but approved by another, increased 1.6 percent year-on-year to 24.3 percent. Geffen explains the month on month improvement in the effective approval rate can be attributed to certain banks easing their lending criteria towards the end of February.
The effective approval ratio showed a year-on-year decrease of 1.1 percent to 64.4 percent and a month-on-month increase of 1.6 percent.