The latest statistics released by bond originator ooba show that June was the 14th consecutive month of positive year-on-year property price growth for first-time buyers, and the eighth consecutive month ooba has recorded an increase in residential property prices.
Geffen says for the month of June, 52% of their total intake of home loan applications was from first time buyers – up 3.8% year-on-year, indicating there is continued appetite in this sector underpinned by improved access to finance.
According to the June oobarometer price index, the average house price shows positive year-on-year growth of 6.1%, and a nominal month-on-month decline of 0.7%.
“This increase indicates that there is sustained demand for property, which is translating into higher property prices,” says Saul Geffen, CEO of ooba. “However, the month-on-month decline does indicate a tempering of the positive momentum.”
The average price of a house bought by a first-time buyer was R682 042 in that month, compared to R603 658a year ago – an increase of 13%. Month on month, the growth was 5.7% on May's average first-time buyer house price of R645 458.
Geffen says for the month of June, 52% of their total intake of home loan applications was from first time buyers – up 3.8% year-on-year, indicating there is continued appetite in this sector underpinned by improved access to finance.
Further good news for first-time buyers is that while there was a slight increase in the initial bank decline ratio (1.1% higher year on year), the ratio of applications declined by one lender, granted by another shows a healthy year-on-year increase to 27.9% from 23.2%.
“The year-on-year growth of applications that are initially declined but then approved by another lender highlights the benefits of using a mortgage originator to cast as wide a net as possible when applying for a home loan,” says Geffen.
The average approved bond size continued to show positive growth, up 4.5% to R733 833 from R702 438 a year ago, while the average deposit currently sits at 15% of the average house price.
The June average bank decline rate is 48.1%, down 1.1% from the prior year. The oobarometer shows that ooba's effective approval rate is up 1.4% year on year, at 65.3%. The trailing effective approval rate, which takes into account loans approved via ooba after month-end is 70.9%, meaning seven out of every 10 home loan applications are currently being approved through ooba.
The statistics also showed that 96% of home loan applications received by ooba in June were from buyers purchasing a primary residence, up from 89% in June 2009. This shows that the buy-to-let market continues to be sluggish despite the relatively cheap cost of raising financing.