Buying a new home continues to become more affordable as weakening housing demand results in ongoing negative real price growth (after inflation) in the residential property market.<\/p>\n
For the first quarter of 2019 (Q1 19) statistics from home loan comparison service, ooba, show negligible year-on-year growth in the average purchase price of 1.6% from Q1 18 to Q1 19.<\/p>\n
Growth in the average purchase price for first-time buyers was also minimal at 0.5% from Q1 18 to Q1 19. This means that house price appreciation remains below inflation, reflective of the current uncertain economic and political landscape, ooba said.<\/p>\n
Rhys Dyer, CEO of ooba, said: \u201cOver and above more affordable property prices, buyers in the current market are also benefitting from higher bank approval rates. Banks continue to display a robust credit appetite and are increasingly approving home loans with lower deposit and also increasingly with no deposit requirements.<\/p>\n
“This is indicative of the banks\u2019 confidence in the property market and in customers\u2019 ability to repay loans.\u201d<\/p>\n
“Our home loan approval rate of 81.3% in the first quarter of 2019 was the highest on record for ooba since May 2007 and importantly, the approval rate on applications without a deposit (100% loans) has increased by almost 8% on Q1 2018,” Dyer\u00a0 said.<\/p>\n
The average deposit as a percentage of purchase price is down by 11.3% year-on-year compared to Q1 2018, from 16.0% of the purchase price to 14.2% of the purchase price in Q1 2019. Similarly, ooba\u2019s statistics showed that deposits for first-time home buyers are down by 21.6% over the same period from 12.5% of the purchase price to 9.8% of the purchase price.<\/p>\n
“More affordable property prices, coupled with reduced bank deposit requirements, higher approval rates and improved home loan pricing create a perfect opportunity for property buyers at present,” said Dyer.<\/p>\n
Banks are competing for a bigger share of the home loans market by approving finance at historically low interest rates, ooba said.<\/p>\n
The group\u2019s statistics for Q1 2019 show that the average interest rate is 5 basis points cheaper year-on-year. The average rate that ooba achieved for its buyers in Q1 2019 was 0.11% above prime compared to 0.16% above prime in Q1 2018.<\/p>\n