Slower house price growth but record approval volumes
The average purchase price recorded by ooba in July was R937,215, which reflects a growth of 3.8% year-on-year and is 2.1% lower month-on-month. The first-time buyers' purchase price showed a year-on-year increase of 3% with a slightly negative growth of -0.7%.
"This slowdown in average purchase price growth offers a good buying opportunity, particularly for first-time buyers, to purchase homes at more affordable prices," said Rhys Dyer, CEO of ooba.
A record high of 55.2% of ooba's July intake of applications came from first-time buyers, 10.4% higher year-on-year. The continued buoyancy of the first-time buyer's segment remains a key driver of the property market.
"Despite recent rate hikes, interest rates are still at comparatively low levels, with house price growth likely to be tracking below average wage growth in the short term, there are still good opportunities for first-time home buyers to get onto the property ladder now," explained Dyer.
The average approved bond size in July was R830,549, which is 7.7% higher year-on-year and 1% lower month-on-month. The average approved bond size for first-time buyers in July was R687,453, which is 10.2% higher year-on-year and an increase of 3.7% month-on-month. The growth in bond size dovetails with the trend in lower deposits. The average deposit decreased significantly year-on-year by 21.9% and month-on-month by 8.1%. The average deposit as a percentage of purchase price in July was 11.4%.
A new high
ooba has also reported a new high in the value of home loan approvals, with the value of home loans approved through ooba in July up 9% from July last year and 15% up month-on-month. According to Dyer, this is the best monthly performance recorded since November 2007. "This again illustrates ooba's success in securing finance for homebuyers," concluded Dyer.
Full July 2014 oobarometer analysis:
| Indicator | Jul-14 | Jul-13 | Change yr on yr (Jul 14 vs Jul 13) | Jun-14 | Change month on month (Jul 14 to Jun 14) |
|---|---|---|---|---|---|
| Avg purchase price | 937,215 | 902,900 | 3.80% | 957,245 | -2.10% |
| Avg purchase price of first time buyer | 731,651 | 710,312 | 3.00% | 736,907 | -0.70% |
| Avg approved bond size | 830,549 | 771,300 | 7.70% | 839,000 | -1.00% |
| Avg deposit (as % of purchase price) | (R106,666) | (R131,600) | 12.40% | ||
| Avg age of applicant | 37 | 37 | No Change | 37 | No Change |
| Avg initial decline ratio (first bank decline) | 46.50% | 47.30% | -0.80% | 45.00% | 1.50% |
| Ratio of applications declined by one lender but approved by another | 29.60% | 29.90% | -0.30% | 26.50% | 3.10% |
| Effective approval ratio | 70.90% | 71.90% | -1.00% | 70.40% | 0.50% |