Statistics for the fourth quarter of 2014 released by ooba, South Africa’s largest bond originator, signal a positive growth for the South African property market in 2015.
The quarterly oobarometer shows that the property market fared well in 2014, with growth of 5.5% in the average house purchase price in the fourth quarter of 2014, compared to Q4 of 2013. The average house purchase price reached a high of R978,502 in Q4 2014 compared to R927,381 in Q3 2013.
Rhys Dyer, CEO of ooba says: “The 2014 property price growth rate is particularly significant considering the estimated economic growth rate of only 1.4% for last year. Improved lending conditions illustrated by Q4 2014’s higher approved bond size, lower average deposit and higher successful approval rates are expected to continue to positively influence the property market in 2015.
“We expect interest rates in the first half of 2015 to remain unchanged due to the expected drop in inflation driven by the fall in fuel and food prices. This will give prospective home buyers additional disposable income, positively affecting their ability to afford a home loan while keeping the property market buoyant.”
Dyer predicts improved growth in house prices in 2015 off the back of expected stronger local and international economic growth. Investor interest in the property market should partly drive this trend, with the buy-to-let market expected to show some recovery in 2015 to satisfy the increased demand for housing.
“It is still a good time to gain a foothold on the South African property ladder, particularly for first-time home buyers, as interest rates are relatively low. And with one of the highest approval rates in the market, ooba continues to prove that using a bond originator gives home buyers a better chance of getting a competitive approval in the shortest possible time at no additional cost,” concludes Dyer.