Johannesburg - There were several positive indicators for
the residential property market, bond originator ooba said on Tuesday.
These included continued year-on-year growth in property
prices, especially for first-time buyers.
Simultaneously, there had been a decline in the size of the
"The average purchase price in July 2012 was R846 863,
up 3.1% from R821 579 in July 2011," said ooba.
For first-time buyers, the average purchase price had
increased by 7.8% year-on-year, from R609 417 in July last year to R657 069 in
July this year.
However, the month-on-month purchase price statistics did
indicate a trend of slowing growth in property prices, in line with slowing
"Of our total intake of bond applications in July, 53%
were from first-time buyers, a five percent increase from last year," says
Rhys Dyer, ooba chief operating officer.
"The sustained higher levels of first-time buyer
activity are underpinning good year-on-year growth in property prices in the
first-time buyer segments."
The average home loan deposit had reduced from 15.1% of the
purchase price in July last year to 12.6% of the purchase price in July this
"The reduction in deposits is a good indicator of bank
credit appetite, reflecting improved access to finance for home buyers with
limited deposits," ooba said.
As a further indicator of credit conditions, the approval
rate had risen to in effect 65.3% of loan applications, from 64.2% last year.
This increase was driven by a "healthy
improvement" in the percentage of applications which were declined by one
bank, but approved by another, from 23.1% of applications last year to 27.6%
The trailing approval rate, including loans approved after
month-end, was 68.6%.
These improved lending conditions continued to drive strong
year-on-year value growth, said ooba.
Home loan applications had seen a 28% increase in value,
while the value of home loan approvals had increased by 38% in July - ooba's
best monthly performance since 2008.
The Reserve Bank's decision to drop interest rates in July
by a further 0.5% was likely to add a further mild stimulus to the lending
environment, improving buyers' ability to qualify for loans.
"This, coupled with the improvements in approval rates
and average deposits, is likely to sustain the current higher levels of lending
activity," said Dyer.
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