ooba’s September Statistics Indicate Mild Property Price Growth and Improved Lender Confidence

In September, the Average Purchase Price recorded by ooba, South Africa’s biggest bond originator, was R896,258, up 2.2% on R876,717 recorded in September the previous year, although marginally down on the R905,200 from the previous month. The Average Purchase Price for First-Time Buyers was R674,590, up 2% year on year.

According to ooba’s latest statistics, the Average Deposit recorded in September, at R126,630, is 14.1% of the purchase price, down from 17.9% recorded in September 2012 and down from 15.0% in the previous month.

In September, 53.7% of ooba’s total bond applications were from first-time buyers, which is similar to the ratio of 53.9% recorded in September 2012, but 2.6% higher month on month.  On average first-time buyers are putting down an 11% deposit on their new homes.

“The first-time buyer market is continuing to be robust, with almost 54% of our home loan applications coming from this segment,” says Dyer. “If you take into account the relatively low average deposit of 11%, you can see that not only is this market growing, but that lenders are giving this market reasonable access to credit.  Importantly however, statistics continue to show the bigger your deposit, the greater your chances of securing home finance and a better interest rate.”

At 47.2%, the Initial Decline Ratio, which shows the proportion of applications rejected by the first lender the application is submitted to, is down year on year by 0.8% and month on month by 1.2%. At the same time, the Ratio of Applications Declined by One Lender, Granted by Another has increased by 1.5% year on year and 0.1% month on month to 28.9%.

ooba’s effective bank approval rate  in September was 66.4%. This is up on the 65.5% achieved in August 2013, and 65.2% in September 2012.

There are a number of indicators that demonstrate banks improved appetite for extending credit for home loans. These include:

  • Lower average deposits, down by 21.2% year on year
  • Lower initial bank decline ratio of  47.2%
  • An increased percentage of applications declined by one lender and then granted by another of 28.9%
  • ooba’s increased effective approval rate to 66.4%. In addition, ooba’s trailing effective approval rate, which takes into account approvals that come through after month-end, is 75.3% – up year on year by 7%. This indicates that over three quarters of loan applications processed through ooba are now being approved.

“With one of the highest approval rates in the market, ooba continues to prove that using a bond originator gives you a better chance of getting your home loan approved, in the shortest possible time at no additional cost,” says Dyer.

Full oobarometer analysis:

Indicator

Sep

2013

Sep

2012

Change yr on yr

(Sep 13 vs Sep 12)

Aug

2013

Change month

on month

(Sep 13 to Aug 13)

Avg purchase price

896,258

876,717

2.2%

905,200

-1.0%

Avg purchase price

of  first time buyer

674,590

 

661,159

 

2.0%

686,176

-1.7%

Avg approved bond size

769,628

719,782

6.9%

769,847

-0.0%

 

Avg deposit (as % of purchase price)

 

14.1%

(R126,630)

17.9%

(R156,935)

-21.2%

15.0%

(R135,353)

-6.0%

Avg age of applicant

37

36

1 Year Older

37

No Change

Avg initial decline ratio

(first bank decline)

47.2%

48.0%

-0.8%

48.4%

-1.2%

 

Ratio of applications declined by one lender but approved by another

 

28.9%

27.4%

 

1.5%

 

28.8%

0.1%

Effective approval ratio

66.4%

65.2%

1.2%

65.5%

0.9%

Hello ooba news

In 2013, South Africa saw slow but steady recovery in the property market, paving the way for greater growth in the year to come.

 

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