JOHANNESBURG – South Africa’s
biggest bond originator, shows that the majority of current homebuyers (52%)
are repeat buyers who are giving real estate a vote of
confidence by re-investing the proceeds of their own sales.
The property market is
showing remarkable resilience and to underline this, according to the latest
statistics from BetterBond.
Chief Executive Officer
Shaun Rademeyer, notes that the company’s application approval ratio has also
risen over the past 12 months from 73% to almost 78%, which indicates a rising
percentage of serious buyers with their finances and credit records in good
order and sizeable deposits.
In addition, the BetterBond statistics*
show a 4% year-on-year increase in the household income of the average repeat
buyer at end-September to R56 000, and a 5% year-on-year increase in the
household income of the average first-time buyer to R37 000.
This accords with the
BankservAfrica Salaries Index, which shows that real (after
inflation) salaries in SA increased by 1,1% in August – which was the sixth
consecutive month of growth.
The underlying strength in
the market is further evidenced, Rademeyer says, by the fact
that the percentage of loans formally granted has risen over the past year from
59,2% to 61,4% of applications, with both repeat and first-time buyers
displaying an increased determination to proceed with their purchases in spite
of SA’s current socio-economic problems.
“However, while the average
approved bond size showed a year-on-year increase of 5,2% at end-September to
R886 000, the average home price paid increased by just 2,8% to R1,1m.
Similarly in the first-time buyer sector, the average approved bond size
increased by 4,7% to R680 000, while the average home price paid increased
by only 3,9%.
“This suggests that there is
still strong downward pressure on prices, and that is confirmed by an analysis
of the number of home loans being granted in each price category.”
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The statistics show that in
the past 12 months, the number of loans granted for more than R1,5m increased
by just one percentage point to 21,4%, while the majority of loans continued to
be granted in the R500 000 to R1m purchase price range (39,5%) and the R1m
to R1,5m range (17,5%).
“In addition, the banks
continue to apply very strict criteria when it comes to granting new credit and
to evaluating properties for home loan purposes, and consumers who apply for
home loans without the assistance of originators are struggling to obtain
approvals even when they are in good financial shape.
“Our high approval ratio is
due in large measure to the knowledge and experience of our home loan
consultants and their ability to motivate individual applications to the
correct lenders. This more than doubles the chance of prospective home buyers
having their loan applications approved.”