Positive growth in property prices

Statistics for the third quarter of 2014 released by ooba, South Africa’s largest bond originator, show continued year-on-year growth in property prices. The quarterly oobarometer is compiled every three months, using data sourced from all home loan applications processed by ooba nationally.

The Average Purchase Price recorded by ooba in Q3 2014 was R967 009, which is an increase of 7.3% on Q3 2013 and is also up by 1.7% on Q2 2014.

The Average Purchase Price recorded by ooba in Q3 2014 was R967 009, which is an increase of 7.3% on Q3 2013 and is also up by 1.7% on Q2 2014. “Despite sluggish economic conditions and the upward pressure on interest rates and inflation, the property market remains resilient with consistent property price growth recorded in the past 18 months,” says Rhys Dyer, ooba CEO.

Average house prices in the first-time buyer segment for Q3 2014 have risen to R746 627, an increase of 8.2% on Q3 2013 and an increase of 1.2% on Q2 2014. “First-time buyers are a key driver of the property market with 53.7% of all our applications received in Q3 2014 coming from this segment, compared to 52.7% in Q3 2013 and 53.3% in Q2 2014,” says Dyer. 

In the past 6 years, ooba’s statistics reveal an increase of almost 75% in the share of first-time buyer applications received. “Now is a good time for first-time buyers to get a foot on the property ladder with interest rates still being at a low level and before house prices rise any further,” he says.

ooba’s third quarter 2014 data shows that the residential market is primarily driven by buyers acquiring property for their own occupation. In the third quarter of 2014 only 3.9% of all home loan applications processed by ooba were buy-to-let purchases compared to 4.4% in Q3 2013 and 4.3% in Q2 2014. This is a significant decrease from the levels recorded in 2008, when buy-to-let purchases represented 11.9% of home loan applications.

ooba’s quarterly statistics show that the home loan approval rate in Q3 2014 remained high at 72.2%, 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 home buyers by being able to submit their home loan applications to multiple lenders, thus ensuring a significantly betterchance of a competitive approval,” says Dyer. 

Article Sourced from Property24