Third quarter statistics (Q3 2017) from bond originator, Ooba, shows nominal positive growth of 3.3% on Q3 2016 in the average house purchase price. And when inflation is factored in, the average price delivered negative growth in real terms, the group said.<\/p>\n
The property market has endured decelerated real price growth for almost two years now, Ooba said, which it noted is unsurprising given the economic environment and political uncertainty.<\/p>\n
A price spike of 6.1% on Q3 2016 in the first-time buyers (FTB\u2019s) average purchase price was recorded in Q3 2017, above the current inflation rate of 5.1%, yielding a real price growth of 1%.<\/p>\n
Rhys Dyer, CEO of Ooba, said: “Last quarter we were concerned about the lacklustre year-on- year growth of 2.9% in the FTB\u2019s Average Purchase Price. Slower demand for entry-level properties is a symptom of affordability challenges, as FTB\u2019s tend to be more sensitive to economic downturns.<\/p>\n
“We are relieved to see a bounce back in the FTB Average Purchase Price, as the demand for entry-level properties picks up in line with the global trend to increased urbanisation.”<\/p>\n
“2017 continues to be a tough year for the residential property market as the subdued economy squeeze consumer purchasing power, along with political uncertainty, negatively affect consumer confidence,” Dyer said. “Despite these drawbacks, Ooba\u2019s Q3 2017 statistics indicate much more favourable home loan conditions.”<\/p>\n
Banks have intensified their competition for home loans, the bond originator said. The recent drop in the prime lending rate and expectations of further rate cuts have created a more positive sentiment and improving affordability for home loan financing.<\/p>\n
“Ooba\u2019s higher approval rate in Q3 2017 of 73.6% compared to Q3 2016\u2019s 71.5%, coupled with a significantly improved average interest rate of prime plus 0.34% in Q3 2017 compared to prime plus 0.46% in Q3 2016, evidences the strong competition among banks for new home loans business,” it said.<\/p>\n
The company said that the average age of a first-time bond applicant is 34, versus 38 for the general average, while the average approved bond was at R988,352, versus R803,352 for a first-time buyer.<\/p>\n
As can be expected in the current economic environment, in Q3 2017 Ooba said it experienced an increase in the number of homebuyers looking for home finance, who have no access to a deposit. It noted that nearly half (48%) of homebuyers who purchased properties in Q3 2017 applied for 100% financing, compared to 44% in Q3 2016.<\/p>\n Approval rates for 100% bond applications have also shown a year on year improvement, up from 70.7% in Q3 2016 to 71.3% in Q3 2017.<\/p>\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2017\/10\/Ooba.png\")
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