Second Quarter 2014 Results from ooba Reveal Property Prices Still Buoyant

In this, ooba’s first ever quarterly oobarometer, we see that the property market continues to show year-on-year growth, according to Quarter 2 (Q2) statistics recorded by South Africa’s largest bond originator.  The Quarterly oobarometer is compiled every three months using data sourced from all home-loan applications processed by ooba nationally.

 

“We are still seeing steady growth in property prices and bond sizes, despite upward pressure on inflation and interest rates,” says Rhys Dyer, ooba CEO.  Between April and June 2014, the average house purchase price increased year-on-year by 4% to R950 507, with house prices in the first-time buyers segment increasing by 8.1% year-on-year.

 

Dyer points out that current conditions remain favourable for first-time buyers to join the property market. “First-time buyers continue to comprise an increasing percentage of our intake received,” he says. “Of all our applications received in Q2, 53.3% were from this segment, compared to 51.9% in both Q2 2013 and Q1 2014.”

 

ooba’s quarterly statistics shows that despite bank approval rates moderating, the homeloan approval rate in Q2 remained high at 70.4%, indicating that the company continues to secure approval for more than seven out of ten  home loans that it processes.  “This highlights the benefits that ooba offers homebuyers by being able to submit their home loan applications to multiple lenders, thus ensuring a significantly better chance of a competitive approval,” he says. 

 

Dyer recommends that home buyers use the services of a bond originator like ooba for prequalification before they are ready to make an offer on a home.  “Our free oobaqualification service incorporates a credit check and affordability rating so that when you make an offer, you can be confident that the banks will approve your bond,” says Dyer.

 

The June 2014 oobarometer Results (monthly statistics) are available on www.ooba.co.za

Quarterly oobarometer Analysis:  April – June 2014

Indicator

Quarter 2

(Apr – Jun 2014)

Quarter 2

( Apr - Jun

2013)

Change yr on yr

(Quarter 2 14 vs Quarter 2 13)

Quarter 1

(Jan – Mar 2014)

Change Quarter

On Quarter

(Quarter 2 14 to

Quarter 1 14)

Avg purchase price

950,507

914,089

4.0%

964,266

-1.4%

Avg purchase price

of  first time buyer

737,768

682,324

8.1%

740,106

-0.3%

Avg approved bond size

820,589

771,602

6.3%

814,090

0.8%

 

Avg deposit (as % of purchase price)

 

13.7%

(R129,918)

15.6%

(R142,487)

-12.2%

15.6%

(R150,176)

-12.2%

Avg age of applicant

37

37

No Change

37

No Change

Avg initial decline ratio

(first bank decline)

46.2%

47.4%

-1.2%

45.0%

1.2%

 

Ratio of applications declined by one lender but approved by another

 

27.0%

26.7%

0.3%

29.7%

-2.7%

 Effective approval ratio

 

70.4%

 

75.2%

 

-4.801.0%

 

76.3%

 

-5.9%