Bond originator, BetterBond says it assisted almost 34,000 buyers to acquire their new homes over the past 12 months, at an average price of R1.1 million.<\/p>\n
It said that the average age of these buyers was 37, and at an interest rate of 10.25%, the average monthly repayment on their loans is R8,631.<\/p>\n
According to BetterBond, its statistics represent 25% of all residential bonds being registered in the Deeds Office. The average approved bond size has increased by 4.5% in the past 12 months, while the average house price has increase by just 2.2%, it said.<\/p>\n
\u201cThese figures correspond to a decline in the average percentage of purchase price being paid as a deposit in the year to end-August, from 22% to 20%,\u201d said CEO, Shaun Rademeyer.<\/p>\n
This, he said, is mostly due to an improvement in disposable incomes, which the BankservAfrica Disposable Salary Index shows as having increased for the fifth consecutive month in July.<\/p>\n
\u201cWage increases, declining inflation and a small interest rate decrease have all played a part in this growth, which simply means that many prospective homebuyers now have more of their take-home pay available to put towards a monthly bond repayment.<\/p>\n
\u201cThis is excellent news for the real estate industry, because it makes the banks more likely to approve home loan applications \u2013 and to lend a bigger proportion of the home purchase price. And taken together with the drastic slowdown in house price growth over the past 12 months from 9.9% to just 2.2%, this definitely opens the door to more successful home sales,” Rademeyer said.<\/p>\n
He warned, however, that the economy is in a fragile state and there is a higher risk that borrowers could suddenly become unemployed. Moreover, approximately 25% of home loan applications submitted are still being declined outright due to credit record problems.<\/p>\n
\u201cWhat is more, only 36% are receiving immediate approval by the first bank to receive the application, which means that prospective borrowers who are applying for home loans on their own only have a very slim chance of their application being approved.\u201d<\/p>\n