‘SA house price growth slowing’Comment on this story
South Africa was showing a marginal year-on-year house price growth of 0.7 percent in August 2012 and a month-on-month decline of 1.3 percent in July 2012, bond originator ooba said on Wednesday.
“The slowing in house price growth seems to be a trend influenced by current economic fundamentals,” said Saul Geffen, CEO of ooba.
He said the house market figures were somewhat conflicting, as both application intakes and approved loans were significantly up on the prior year.
Despite the slowing growth in average house prices, ooba was still reporting a 28 percent year-on-year increase in the value of home loan applications and a 44 percent year-on-year increase in the value of its home loan approvals in August 2012.
This indicates that the property market was still very active.
Geffen said the percentage of first-time home buyers was at record levels of around 53 percent, and this changed applicant mix was continuing to favour the purchase of smaller, more affordable properties.
This could also be influencing the overall house price trend downwards.
This was demonstrated in the higher median house price growth recorded, which has averaged close to six percent over the past three months.
The average purchase price for first-time buyers increased 6.6 percent year on year from August 2011 to August this year and 0.4
Geffen said credit conditions remain favourable for buyers.
The average home loan deposit was down 47.2 percent from last year, which was 11.4 percent of the purchase price.
“This is the lowest average deposit recorded since June 2008,” said Geffen.
However, the deposit requirements were likely to increase because the banks’ appetite for 100 percent home loans was diminishing. - Sapa