Deposits fall as home prices drop

13 Apr 2012

The average home purchase price being paid by buyers applying for mortgage finance dropped 3% from R817 684 in February to R793 332 in March – and was also 1.8% down on the figure for March 2011.

The average first-time buyer purchase price declined 2.3% from R609 587 in February to R595 301 in March – and was almost 9% down year-on-year. This puts the average purchase price below the transfer duty threshold.

This is according to the latest statistics from mortgage originator BetterBond, which also indicate the percentage of 100% bonds being granted rose to 35.5% in March from 26% in March last year (see table below).

In addition, the percentage of purchase price that non-100% borrowers were required to pay as a deposit in order to secure a home loan fell to 15.9% in March from 18.9% a year previously – which in rand terms equated to a saving for homebuyers of more than R27 000.

As SA’s biggest originator, BetterBond is currently responsible for 25% of all residential mortgage bonds being registered in the Deeds Office and its figures include applications to and bond grants from all the major lending banks in SA.

Its statistics for March show that first-time buyers are now also much better off than they were a year ago. The average first-time buyer purchase price declined 2.3% from R609 587 in February to R595 301 in March – and was almost 9% down year-on-year. This puts the average purchase price below the transfer duty threshold.

The deposit requirement for first-time buyers has also declined substantially over the past year (from 16% to 10%) although the March figure was slightly up on that for February (9.5%). In rand terms, this drop means a saving for first-time buyers of more than R44 000.  

“Our records also show, though, that the percentage of home loan applications being made by first-time buyers has fallen off sharply in the past year from 54% to just under 44%,” says BetterBond CEO Rudi Botha, “although the percentage of bonds being granted to black buyers has remained stable at 35 to 36% of the total.”

On the other hand, the number of individual bond applications (unique deals) processed by BetterBond in March was 30% higher than that processed in February, and 45% up on the total for March 2011.

Botha says this indicates that overall demand is well up – and that a much bigger percentage of this is now coming from repeat homebuyers.  

 

March ‘12

March ‘11

Annual
diff %

Feb ‘12

Month
diff %

Av purchase price

793 332

807 809

- 1,8

817 684

- 3

Av % deposit required

15,9%
(125 835)

18,9%
(152 769)

- 15,9

16,9%
(135 924)

- 0,4

Av 1st time price

595 301

652 985

- 8,8

609 587

- 2,3

Av 1st time % deposit required

10%
(60 114)

16%
(104 816)

- 37,5

9,5%
(57 987)

+ 5

1st time % of apps

43,8%

54%

- 18,7

47%

- 6,4

Av black buyers’ price

545 884

563 312

- 3,1

566 198

- 3,6

Black buyers % grants

36%

35%

+ 4,3

36%

+ 1,2

Av age applicant

36

38

- 5,3

36

--

No unique deals

2961

2038

+ 45,3

2270

+ 30,4

No 100% bonds

1052
(35,5%)

527
(26%)

+ 36

827
(36%)

- 0,1

Av price 100% bonds

601 829

590 475

+ 1,9

613 991

- 2

bSource: BetterBond 

 

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