Average house prices down 3.5%

Published Jun 15, 2011

Share

Residential house prices in SA have fallen slightly in May from a year earlier, according to the latest statistics recorded by ooba.

The bond originator said, however, that the environment remained conducive to new homebuyers, with lenders continuing to relax their lending criteria.

The May oobarometer recorded a year-on-year (y/y) decline of 3.5% in the average purchase price to 841,212 rand from 872,083 rand a year earlier.

However, on a month-on-month basis, residential property prices increased 2.2% in May from April. The average purchase price of first-time buyers increased 2.6% y/y to 618,003 rand, from 604,857 rand a year earlier.

Saul Geffen, CE of ooba, said other statistics showed that banks were continuing to relax their lending criteria.

“The average initial decline ratio fell 5.8% to 47.1% y/y in May, indicating that an increased proportion of home loan applications are being approved,” Geffen said.

Applications declined by one lender but approved by another were up 6.1% y/y to 22.3% in May.

The average deposit size recorded a y/y decrease of 2.2% to 17.4% and the effective approval ratio increased 7.7% to 63.4%. The average approved bond size fell 3.1% to 694,755 rand during the period from 716,850 rand a year ago.

“Residential property prices are in negative territory and are expected to remain marginally negative before improving towards the end of the year. The spectre of rising interest rates does create further downside risk. However ooba has seen significant increases in home loan applications, suggesting demand is underpinning a recovery,” concluded Geffen. - I-Net Bridge

Related Topics: