2014 the year Home buyers Dreams came True

The real estate market is ending the year on a strong note, with billions of rands’ worth of new home loans having been granted and many thousands of buyers happily settled into their new homes.

“Home values also continue to rise and the percentage of loan applications that are turned down, continues to decline as the banks pursue new mortgage business, so there is definitely room for optimism.”

-Shaun Rademeyer, CEO of BetterBond Home Loans.

Thousands of Home Loans Granted
According to the group’s latest statistics, it secured home loan approvals worth some R36,5bn for more than 48 000 homebuyers in the 12 months to end-November – with the largest percentage of loans (39%) being granted in the R500 000 to R1m category, he says.

First Time Buyers Rising in South Africa
“What makes us especially proud, though, is that almost half (48%) of those loans went to first-time buyers, who were thus able to realise their dreams of home ownership this year and start laying the foundations of wealth creation for themselves and their families.”

Purchase Price Portfolio in South Africa 2014
The BetterBond figures show that the average home purchase price in its portfolio rose 5,42% year-on-year in November to R917 641, while the average purchase price for first-time buyers grew 3,94% to R643 372. At the same time, however, the percentage of purchase price  required as a deposit declined to 16,64% on average – and to an average of 8% in the case of first-time buyers – which meant that buyers required less cash to be able to complete their transactions.

The percentage of home loan applications being declined outright dropped to 30% in the year to end-November, compared to 34% in the previous 12 months, indicating an improved level of creditworthiness among prospective borrowers.

“However, the percentage of applications declined by one bank but then ‘rescued’ by BetterBond and approved by a different bank, remained at 37,5% in the same period.

“In the past 12 months, more than half the applications that made it past the initial cut would also have failed were it not for our willingness to motivate individual applications and, if necessary, submit them to a second and sometimes even a third lender.

BetterBond was able to ‘rescue’ some R17,8bn worth of applications for more than 24 000 very happy buyers, maintaining their record of ensuring approval for three out of every four applications.

ARTICLE COURTESY PROPERTY JUNCTION WEBSITE