South African residential property prices grew by 0.6 percent year-on-year (y/y) in August according to the latest report by ooba, bond originator.

The average age of the first time buyer also increased by one year to 37 years old.

The August oobarometer price index revealed that the average house price rose 0.6 percent y/y to R829 897 from R825 264 in the same period in 2010.

A positive growth of 1 percent was recorded on a month-on-month basis in August 2011 from July.

Growth in the average purchase price among first time buyers also showed a significant increase, with y/y growth of 9.2 percent to R619 139 in August 2011 from R566 845 in 2010.

Saul Geffen, chief executive officer of ooba says August is the fourth consecutive month that they have witnessed an increase in purchase price among first-time buyers.

“With rates still at a 30 year low, improved affordability has enabled many first time buyers to take the leap,” he says.

The report also indicates that the y/y average bank decline ratio remained unchanged at 46.1 percent in August.

The ratio of applications declined by one lender but granted by another show a y/y decrease of 7.7 percent to 22.7 percent. This according to the report resulted in the effective approval rate decreasing by 3.5 percent to 64.4 percent.

Geffen says these figures highlight the need for consumers to shop around.

“Homebuyers are assured a higher probability of an approved loan if they apply to more than one bank. The stats show that more than 1 in 5 applications would remain declined had they not been presented to alternative lenders.”

In August, the average approved bond size decreased by 6.2 percent to R671 772 from R716 358 in 2010.

The average deposit as a percentage of purchase price increased by 44.7 percent y/y to R158 125, equivalent to 19.1 percent of purchase price. The average age of the first time buyer also increased by one year to 37 years old.

Chas Everitt reports an increase in young buyers entering the market in Gauteng’s Centurion areas including Celtisdal, Heuweloord and Rooihuiskraal.

According to Paul Greyling, owner of the local Chas Everitt International franchise, buyers are mostly young couples and families and the most popular choices are sectional title townhouses and duet homes.

Greyling says a slight easing of credit restrictions on the part of banks are assisting his office to now get three out of four loan applications approved.

“The number of distressed properties in our areas has dropped dramatically in the past three months. “Combined with the increase in demand, this is helping to put a floor back under local home prices that bodes well for future value increases.”

He says the main draw cards for buyers in Celtisdal, Heuweloord and Rooihuiskraal are proximity to main access routes such as the N1 and N14, as well as good pre-primary and primary schools and convenient shopping venues such as Reds Mall.

Buy-to-let investors in the platinum mining areas around Burgersfort in Limpopo are getting good value for money as demand for rentals is on the increase.

Elsa de Bruyn, owner of the local RealNet franchise says in the past two years, demand for rentals in the town have rocketed in the past two years.

Two bedroom flats are renting for R5 500 a month and three bedroom townhouses for between R7 500 and R9 000 a month. Rentals for freehold homes start from R9 000 up to R15 000 a month, even R20 000 for bigger or more luxurious properties.

 “There are now some newly-built units coming on to the market that are just right for investors keen to make the most of this opportunity.”

In more secure estates such as Leopard’s Bush, Spekboom River Estate and Motaganeng Estate, there is a wide selection of stands on offer at prices from around R220 000. For investors interested in more upmarket options, there are still a few 1000square metre stands available in Swallow’s Crest estate, which is comprised of just 42 home sites.

“Homes already built in these estates currently range in price from around R950 000 to R4 million.  

She says it doesn’t seem as if the demand in Burgersfort will be short-lived.  It has been estimated that the town will need 7 500 more homes just in the short to medium-term due to the ongoing expansion of mining and commodities production in the Sekhukhune area. – Denise Mhlanga

Readers' Comments Have a comment about this article?  Email us now.