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Residential house prices show increase in December 2011
According to the latest oobarometer results released by ooba - one of South Africa's leading bond originators - property prices showed positive year-on-year growth of 6.2% in December. Although this increase is a positive development for the local residential property market, ooba predicts that the market will continue to trade sideways in 2012.
The December oobarometer price index reveals that the average house price rose to R870 564 from R819 977 a year earlier. A month-on-month increase of 3.6% was also recorded in December. The growth in the average purchase price amongst first time buyers showed a significant increase, with year-on-year growth of 14.5% to R656 230 in December 2011 from R573 112 a year earlier.
Saul Geffen, CEO of ooba, says that while this increase is encouraging, he anticipates that residential property prices will continue to drift sideways throughout 2012 and doesn't expect the average annual property price growth to exceed inflation by much this year.
According to other indicators tracked by ooba, the average approved bond size increased 3.6% year on year in December to R722 529, up from R697 572 a year earlier. The average deposit as a percentage of purchase price increased by 14.1% year-on-year to R148 035, equivalent to an average deposit of 17.0% of the purchase price.
Potential homeowners can still take advantage of low rates, subdued prices
The initial bank decline ratio has increased by 6.2% year-on-year to 51.7% and the effective approval ratio decreased year-on-year by 8%. Geffen says that the numbers continued to be impacted by a changed mix of applications. "The effective approval ratio has been influenced by the changed mix of applications received in December, which typically have lower approval rates. Additionally, December applications usually result in a larger rollover of conversions to the following month, given the holidays towards the end of the month."
Geffen says that potential homeowners can still take advantage of the historically low interest rates and subdued property prices in 2012. "With the interest rate anticipated to remain low in 2012, and with property prices remaining depressed the current market represents a favourable environment for buyers."
Full oobarometer analysis:
About ooba
ooba are experts in home loan origination, knows the banks, understands the system and negotiates with the banks to get the best deal for homebuyers. Since 1998, has secured more than R200 billion in home loans for our clients. Go to www.ooba.co.za for more information.
