Photo: Leon Nicholas.

House prices continued to show moderate growth in October‚ growing 3.8% to R854‚740 year on year‚ the latest statistics from SA’s biggest bond originator ooba showed on Monday.

For the month of October‚ ooba reported record high approvals‚ up 47% on October last year.

“The house price numbers reinforce the recent trend of continued subdued average price growth‚” ooba CEO Saul Geffen said.

“However‚ ooba’s market experience paints a different picture with aggressive growth experienced in both applications received and in approved home loans.”

House prices for first-time buyers grew marginally to R649‚424‚ representing a 3.8% year on year growth. The percentage of first time buyers among ooba’s total applications dropped 1.5% from September’s record high to 52.4%.

“The changing mix of home loan applicants is having a suppressing effect on the growth in average home prices” Geffen said.

“Given the consistent record levels of first-time home buyers of over 50% of all applications‚ the changed applicant mix is continuing to favour the purchase of smaller more affordable properties‚ which may be suppressing the overall house price trend.”

The average home loan deposit showed a decrease to 13.5% of the purchase price.

The average approved bond size increased 11.8% to R739‚340 in October this year from R661‚377 in October last year. The approved bond size also showed a 2.6% increase month on month.

Ooba figures also showed that although the initial decline ratio increased 4.4% to 48.8% in October‚ the percentage of applications that are declined by one bank but approved by another improved by 2.9% to 24.9%.

Ooba’s effective approval rate‚ which is the overall percentage of loans approved once ooba has shopped around to all banks‚ was 63.4% in October‚ and ooba’s trailing approval rate‚ which takes into account loans approved after month-end‚ is currently 70.7%.

“Credit conditions remain favourable for buyers‚ and ooba is currently obtaining approval for seven out of every 10 home loan applications it receives‚” Geffen said.

However‚ he cautions buyers that deposit requirements are likely to increase.

“The banks’ appetite for 100% home loans is diminishing‚” he concluded. - I-Net Bridge