First-time home buyers surge in 2010 | Fin24
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First-time home buyers surge in 2010

Feb 21 2011 11:56
I-Net Bridge
Johannesburg - First-time buyers made up almost half of all home loan applications in 2010, a bond originator said on Monday.

Research by ooba showed that in 2010, the proportion of first-time buyers as a percentage of total applications increased to 47.61%.
This is the highest since ooba began tracking the statistics, and is a 15.96% increase on the proportion of first-time buyers since these records began in July 2005.

The figure, however, was influenced by the reduction in the overall number of property investors.

Saul Geffen, CEO of ooba, said the change in profile of home buyers is a welcome development for the housing market.

"Higher levels of activity among first-time buyers are generally a positive indicator for the housing market, as demand increases and there are positive knock-on effects," Geffen said.

"With capital growth having curtailed and buy-to-let investors having fallen away considerably, the relative proportion of first-time buyers would naturally increase," he said.

The reduction in interest rates of 650 basis points since 2008 has also been a contributing factor.

"With rates now standing at a 30-year low, improved affordability has enabled many would-be homeowners to take the leap, as the cost of servicing a bond has reduced considerably," he said.

Other factors included an easing in lending conditions, relatively low property price growth compared with recent years, low inflation rates and some real wage growth.

He said potential first-time buyers should aim to put down a deposit, as those who do so are more likely to get their home loan approved and also obtain a more favourable interest rate on their bond.

ooba  |  property  |  property market


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