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Johannesburg - House price growth in South Africa continued to moderate in August from its recent strong levels, according to results released by South African bond originator Ooba.
The Oobarometer price index showed the average house purchase price increased by 3.8% year-on-year in August to R825 264 from R795 241 a year earlier.
Ooba CEO Saul Geffen says he expects the level of growth in house prices to continue at a slower pace for the rest of the year.
"House prices have shown remarkable resilience to the current economic environment although we do expect growth to be slower going forward on the back of a very strong first half of 2010."
Last week's interest rate cut took interest rates to a 30 year low.
"Whereas there is some relief for home owners and home buyers with a 50 basis points cut, given the slowing economic recovery and high debt ratio, the cut is unlikely to have any significant impact on the property market. Of course, interest rates in single digits is a positive and the benefits of improved affordability and sentiment will certainly filter through to demand and lending," Geffen said.
The average purchase price of a first time buyer was in line with the broader housing market with a 3.1% increase to R566 845 from R549 949 a year earlier.
Other statistics also revealed positive trends for potential home buyers with the average approved bond size increasing 20.4% year-on-year to R718 268 from R596 575.
The average deposit as a percentage of the purchase price also showed a significant 48.0% drop to just 13% of the purchase price - equivalent to R106 996 - from 25% or R198 666 a year ago.
Geffen said the figures indicate that the banks are continuing to relax their lending criteria in line with improved property market conditions.
The average initial decline ratio remained stable, up a marginal 1.0% to 46.1%. However, the ratio of applications declined by one lender but approved by another improved significantly, to 30.4% from 19.2% a year earlier.
As a result, the effective decline ratio fell 4.4% year-on-year to 32.0% from 36.4%, giving an effective approval rate of 68%, the highest level recorded since October 2008.
Primary residence applications made up 94.3% of the total applications in August showing that the investment market remains constrained.
Geffen noted that nearly a third of homebuyers who have had their bond application declined have subsequently been approved by another lender, demonstrating the importance of shopping around when looking for a home loan.
The Oobarometer price index showed the average house purchase price increased by 3.8% year-on-year in August to R825 264 from R795 241 a year earlier.
Ooba CEO Saul Geffen says he expects the level of growth in house prices to continue at a slower pace for the rest of the year.
"House prices have shown remarkable resilience to the current economic environment although we do expect growth to be slower going forward on the back of a very strong first half of 2010."
Last week's interest rate cut took interest rates to a 30 year low.
"Whereas there is some relief for home owners and home buyers with a 50 basis points cut, given the slowing economic recovery and high debt ratio, the cut is unlikely to have any significant impact on the property market. Of course, interest rates in single digits is a positive and the benefits of improved affordability and sentiment will certainly filter through to demand and lending," Geffen said.
The average purchase price of a first time buyer was in line with the broader housing market with a 3.1% increase to R566 845 from R549 949 a year earlier.
Other statistics also revealed positive trends for potential home buyers with the average approved bond size increasing 20.4% year-on-year to R718 268 from R596 575.
The average deposit as a percentage of the purchase price also showed a significant 48.0% drop to just 13% of the purchase price - equivalent to R106 996 - from 25% or R198 666 a year ago.
Geffen said the figures indicate that the banks are continuing to relax their lending criteria in line with improved property market conditions.
The average initial decline ratio remained stable, up a marginal 1.0% to 46.1%. However, the ratio of applications declined by one lender but approved by another improved significantly, to 30.4% from 19.2% a year earlier.
As a result, the effective decline ratio fell 4.4% year-on-year to 32.0% from 36.4%, giving an effective approval rate of 68%, the highest level recorded since October 2008.
Primary residence applications made up 94.3% of the total applications in August showing that the investment market remains constrained.
Geffen noted that nearly a third of homebuyers who have had their bond application declined have subsequently been approved by another lender, demonstrating the importance of shopping around when looking for a home loan.
