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Johannesburg - South Africa's residential property market is continuing to experience a moderation in price increases, in line with the slower economic growth predicted for the third quarter of 2010, according to the October results by bond originator ooba.
The oobarometer price index showed the average house purchase price increased 1.4% year-on-year (y/y) to R832 705 in October 2010, from R820 885 a year ago.
This is substantially slower than the double-digit y/y growth recorded in three separate months during the first half of the year.
The average purchase price by first-time buyers showed a marginal increase in growth, up 0.7% to R601 039 in October from R597 075 a year earlier.
Saul Geffen, CEO of ooba, said the results were indicative of a slower trend following a strong first half of 2010.
“We witnessed strong levels of growth in residential property prices in the first half of the year despite continuing tough economic conditions, so it is not surprising that price inflation is tapering off,” he said.
Geffen said that while growth is still slowing, the fundamentals of the property market remained stable, because of low interest rates.
“There is continued speculation over whether we may see further rate cuts in the future. While we do not expect another cut to have any significant immediate impact on property price growth, the expectation of continued low rates is positive," he said.
Other statistics released by ooba showed that the average approved bond size slipped 1.2% to R681 213 in October from R689 785 a year ago, while the average deposit increased 13.8% to R151 492, equivalent to 18.2% of the average purchase price.
Geffen said there had been an increase in home loan approvals.
The higher approval rate indicates that just over two-thirds of homebuyers are now successfully obtaining home loans.
“This approval rate is considerably up from the lows experienced over the past few years and is a clear indication that lenders are more confident about the property market and the prospects of economic recovery," said Geffen.
The oobarometer price index showed the average house purchase price increased 1.4% year-on-year (y/y) to R832 705 in October 2010, from R820 885 a year ago.
This is substantially slower than the double-digit y/y growth recorded in three separate months during the first half of the year.
The average purchase price by first-time buyers showed a marginal increase in growth, up 0.7% to R601 039 in October from R597 075 a year earlier.
Saul Geffen, CEO of ooba, said the results were indicative of a slower trend following a strong first half of 2010.
“We witnessed strong levels of growth in residential property prices in the first half of the year despite continuing tough economic conditions, so it is not surprising that price inflation is tapering off,” he said.
Geffen said that while growth is still slowing, the fundamentals of the property market remained stable, because of low interest rates.
“There is continued speculation over whether we may see further rate cuts in the future. While we do not expect another cut to have any significant immediate impact on property price growth, the expectation of continued low rates is positive," he said.
Other statistics released by ooba showed that the average approved bond size slipped 1.2% to R681 213 in October from R689 785 a year ago, while the average deposit increased 13.8% to R151 492, equivalent to 18.2% of the average purchase price.
Geffen said there had been an increase in home loan approvals.
The higher approval rate indicates that just over two-thirds of homebuyers are now successfully obtaining home loans.
“This approval rate is considerably up from the lows experienced over the past few years and is a clear indication that lenders are more confident about the property market and the prospects of economic recovery," said Geffen.
