September oobarometer shows 1.8% rise in year-on-year annual house prices

September oobarometer shows 1.8% rise in year-on-year annual house prices

The September oobarometer price index recorded an increase in the year-on-year house prices of 1.8%.

"The September oobarometer continues to reflect an improvement in year-on-year house prices," says Rhys Dyer, chief executive of ooba. "This is the fourth consecutive month that the oobarometer has reported rising house prices and is clear evidence that the market is on the road to recovery."

The average purchase price according to the oobarometer was R806,494 last month compared to R791,478 in September 2008.

The month-on-month average purchase price has also increased by 1.4% from R795,241 in August this year.

"ooba also saw a surge of 21% in the month-on-month value of approved bonds in September as improved affordability and sentiment translated into increased transaction volumes. This was supported by improved lending appetite," states Dyer.

ooba has recorded increases in the value of approved bonds for the past five consecutive months.

The year-on-year average approved bond size has increased by 8.2%, from R651,707 in September 2008 to R705,744 in September this year. The month-on-month bond size has also increase by 15.5% from R611,026 in August this year.

There has been a substantial reduction in the average deposit as a percentage of purchase price in both the month-on-month data and the year-on-year data as banks loosen lending criteria and offer 100% loans.

"The main contributor to the significant drop in average deposits as a percentage of purchase price is a result of the shift in banks lending criteria to lower deposit requirements, with all four big banks now offering 100% home loans," states Dyer. "The improved appetite to lend will support the increased demand for property as transaction volumes continue to pick up."

The year-on-year average deposit as percentage of purchase price shows a 28.9% reduction. Buyers now require an average deposit of 12.5% compared to 17.6% last year. There was a significant month-on-month reduction from an average deposit of 23.1% in September.

The average purchase price of a first time buyer was R575,811 in September this year compared to R554,688 in September last year showing a 3.8% rise. This is also an increase of 4.7% from R549,949 in August this year.

The average bank decline ratio shows an improvement and is now at 48.4%, a 3.6% improvement on the previous year's 52%.

"One of the biggest drivers of a market recovery is bank lending and we have seen an improvement in competitiveness between the banks over the past five months and an increase in approval rates," Dyer said. "Banks are now targeting non-bank clients and rate concessions are becoming more aggressive."

Full oobarometer analysis:

Indicator

September

2009

September

2008

Change yr on yr (Sep 09 vs Sep 08)

August

2009

Change month on month (Sep 09 to Aug 09)

Avg purchase price

R 806,494

R 791,478

1.8%

R 795,241

1.4%%

Avg purchase price

of  first time buyer

R575,811

R 554,688

3.8%

R549,949

4.7%

Avg approved bond size

< p align="center">705,744

< p align="center">R 651,707

8.2%

R 611,026

15.5%

Avg deposit (as % of purchase price)

12.5%

(R 100,750)

17.6%

(R 139,771)

-28.9%

23.1%

(R184,215)

-47.1%

Avg age of applicant

37

37

No change

36

1 Year Older

Avg decline ratio

48.4%%

52.0%

3.6% decrease

45.1%

3.3% increase

Ratio of applications declined by one lender but approved by another

19.5%

37.3%

17.8% decrease

19.2%

0.3% increase

Hello ooba news

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