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Double-digit property price growth for May

24 Jun 2015

Despite slow economic growth, positive property market and home loan lending conditions continue to prevail in South Africa, according to bond originator ooba’s May property indicators. 

The Average Purchase Price increased in May by 13.3% to R1 072 615, says Rhys Dyer, ooba CEO, and this is the second consecutive month that the oobarometer has recorded double-digit year-on-year house price growth.

The Average Purchase Price increased in May by 13.3% to R1 072 615, says Rhys Dyer, ooba CEO, and this is the second consecutive month that the oobarometer has recorded double-digit year-on-year house price growth. 

The oobarometer also shows sustained year-on-year growth in the Average Purchase Price for First-Time Buyers, with an 8.6% rise to R796 261. 

Dyer says six months ago, first-time buyers accounted for 56% of applications made to ooba, but this ratio dropped to 51% in May, indicating a greater mix of higher value second-time buying activity in the market. 

“Of all applications received in May, 96% were for the purchase of a primary residence, indicating continued weakness in buy-to-let and holiday homes financing activity,” he says. 

Statistics show that ooba secures approvals for over seven out of ten home loans that it processes, with its May approval rate at 75%. “Approval rates are 2.5% higher year-on-year and the average interest rate achieved by ooba in May 2015 was prime plus 0.34%, which is well down on the average of prime plus 0.58% achieved in May 2014. 

“Our statistics point to continued competition in the market for home loan business amongst lenders, highlighting the importance of using an originator to source multiple quotes,” says Dyer. 

He says ooba’s bond origination services give home buyers the choice of loan offers from up to nine lenders. 

Being prequalified for finance before making an offer on a property puts the buyer at an advantage. By using ooba’s prequalification service, Dyer says home buyers can focus on “finding their dream home, while ooba finds the money”. 

He says prequalification experts can assist buyers to access and assess their credit report, calculate their affordability, compile the relevant paperwork and provide a prequalified loan certificate.

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