ooba's August Results Reflect Sustained Growth in Property Market

The latest statistics from ooba, South Africa’s biggest bond originator, show continued strengthening in residential property prices.

ooba’s Average Purchase Price has shown a year-on-year price growth of 8.3% to R905,20, while the First-time Buyers’ Purchase Price is showing a year-on-year increase of 4% to R686,176. Applications from first time home buyers remain high, with 51.1% of ooba’s intake of bond applications in August from this segment.

“ooba statistics continue to show consistent house price growth for 2013, reflecting the positive residential demand growth and better market fundamentals that prevail,” says Rhys Dyer, CEO of ooba.

The Average Approved Bond size is higher year on year by 3.9%, while the Average Deposit, at 15% of the purchase price, is higher both year on year and month on month by 31.6% and 2.7% respectively. ooba statistics for August show that first-time buyers are placing a deposit of just under 10% on their new homes.

“The higher an applicant’s deposit, the better their chances of getting bond approval and a favourable interest rate,” says Dyer. “We always stress to any prospective home buyer that a deposit is critical to improving their chances of obtaining a home loan.”

While the Initial Bank Decline ratio is higher year on year by 1.8% to 48.4%, the Ratio of Applications Declined by One bank, but granted by another has shown a year-on-year increase of 3.0%, to 28.8%.

“This shows that the value proposition that ooba offers – of applying to multiple banks simultaneously – really does assist applicants in securing their home loan,” says Dyer.

ooba’s Effective Approval Rate, which takes into account those applications approved after month-end, is currently 74%, showing that ooba is obtaining approval for more than seven out of every 10 home loan applications it receives.

To improve home buyers’ chances of securing home finance, ooba has also launched an expanded prequalification service called oobaqualified. This service provides a network of highly skilled pre-qualification experts located around the country to assist home buyers to access their credit report, assess their credit standing, calculate their affordability, compile the relevant paperwork and, within 24 hours, provide them with a prequalified loan certificate.

“Banks have a better appetite for extending credit to qualified buyers, and being prequalified allows buyers to shop in the right price bracket with the confidence that in all likelihood, their bond will be approved,” says Dyer. “It makes sense for any prospective home buyer to get oobaqualified before they start to look– and this is a free service.”

Full oobarometer analysis:

Indicator

Aug

2013

Aug

2012

Change yr on yr

(Aug 13 vs Aug 12)

Jul

2013

Change month

on month

(Aug 13 to Jul 13)

Avg purchase price

905,200

836,055

8.3%

902,900

0.3%

Avg purchase price

of  first time buyer

686,176

659,885

4.0%

710,312

-3.4%

Avg approved bond size

769,847

741,166

3.90%

771,300

-0.2%

 

Avg deposit (as % of purchase price)

 

15.0%

(R135,353)

11.4%

(R94,889)

31.6%

14.6%

(R131,600)

2.7%

Avg age of applicant

37

37

No Change

37

No Change

Avg initial decline ratio

(first bank decline)

48.4%

46.6%

1.8%

47.3%

1.1%

 

Ratio of applications declined by one lender but approved by another

 

28.8%

25.8%

3.0%

29.9%

-1.1%

Effective approval ratio

65.5%

65.4%

0.1%

66.8%

-1.3%

 

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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