oobarometer results show property market recovery continues to gather momentum

oobarometer results show property market recovery continues to gather momentum

The latest statistics released by ooba, South Africa's leading home loan originator, shows that the recovery in the residential property market accelerated in February. The oobarometer price index recorded a year-on-year nominal price increase of 11.4% from R803 642 to R895 031.

February was also the ninth consecutive month of positive house price growth, which signifies that the recovery in property prices continues to gather momentum.

The average approved bond size showed a year-on-year increase of 13.9% and a month-on-month increase of 13.8%, which is in line with the higher purchase prices and lower deposits recorded in February. The average deposit has dropped by 8.9% over the 12-month period. "The banks more relaxed deposit criteria has stimulated buyer activity and supported increased application volumes," says Saul Geffen, CEO of ooba.

According to the oobarometer, the average purchase price of the first time buyer has also shown a year-on-year price growth of 11.4%.

The average bank decline ratio has not dropped significantly over the last few months. While there has been an increase in approval rates for applications with deposits, this is being offset by the higher percentage of applications for 100% bonds, which the banks are still cautious on, and which have lower approval rates.

The ratio of applications declined by one lender but approved by another, reflected a month-on-month increase of 2.1% in February. "This indicates that the opportunity to secure an approval from another bank when the initial bank has declined the application is beginning to improve," says Geffen.

"From the statistics over the last nine months, it is evident that house prices are firmly back in positive territory, and we expect property prices to continue to rise throughout 2010."

Full oobarometer analysis:

Indicator

February

2010

February

2009

Change yr on yr (Feb 10 vs Feb 09)

January

2010

Change month on month (Feb10 to Jan 10)

Avg purchase price

R 895,031

R 803,642

11.4%

R 830,513

7.8%

Avg purchase price

of  first time buyer

R 633,033

R 568,066

11.4%

R 585,992

8.0%

Avg approved bond size

< p align="center">R721,107

< p align="center">R 632,837

13.9%

R 633,467

13.8%

Avg deposit (as % of purchase price)

19.4%

(R 173,924)

21.3%

(R 170,805)

-8.9%

23.7%

(R197,046)

-18.1%

Avg age of applicant

36

37

1 year younger

37

1 Year Younger

Avg decline ratio

51.5%

50.2%

1.3%

50.4%

1.1%

Ratio of applications declined by one lender but approved by another

21.9%

21.8%

-0.1%

19.8%

2.1%

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