Residential property prices up

Residential property prices showed moderate positive growth during August, according to the latest results released by bond originator ooba.

The August oobarometer price index revealed that the average house price rose 0.6% year on year to R829,897 from R825,264 a year earlier.

Positive growth of 1% was recorded on a month-on-month basis in August from July. Growth in the average purchase price amongst first time buyers also showed a significant increase, with year-on-year growth of 9.2% to R619,139 in August from R566,845 a year earlier.

“August is the fourth consecutive month that we have witnessed an increase in purchase price amongst first time buyers, which is encouraging,” says Saul Geffen, CEO of ooba. “With rates still standing at a 30-year low, improved affordability has enabled many first time buyers to take the leap.”

Other statistics published by ooba reveal that the year-on-year average bank decline ratio remained unchanged at 46.1% in August, while the ratio of applications declined by one lender but granted by another is showing a year-on-year decrease of 7.7% to 22.7%. This resulted in the effective approval rate decreasing by 3.5% to 64.4%.

Geffen says these figures highlight the need for consumers to shop around.

“Homebuyers are assured a higher probability of an approved loan if they apply to more than one bank. The stats show that more than one in five applications would remain declined had they not been presented to alternative lenders.”

In August, the average approved bond size decreased by 6.2% to R 671,772 from R716,358 a year earlier. The average deposit as a percentage of purchase price increased by 44.7% year on year to R158,125, equivalent to 19.1% of purchase price. The average age of the first time buyer also increased by one year to 37 years old. - I-Net Bridge