While the statistics indicate that property sales in July reflected the trend of positive year-on-year growth, the pace of growth is beginning to slow. This, despite the economic challenges South Africa has been facing of late. Ructions within the mining industry and manufacturing sector don’t appear to have altered buyers’ minds about investing in property and the fact that banks are apparently more than willing to grant bonds to those who qualify is terrific news for buyers and sellers alike. The average purchase price recorded by ooba in July was R937 215, which reflects a growth of 3.8% year-on-year and is 2.1% lower month-on-month. The first-time buyers’ purchase price showed a year-on-year increase of 3%, with a slightly negative growth of -0.7%.
“This slowdown in average purchase price growth offers a good opportunity, particularly for first-time buyers, to purchase homes at more affordable prices,” says Rhys Dyer, CEO of ooba. A record high of 55.2% of ooba’s July intake of applications came from first-time buyers, 10.4% higher year-on-year. The continued buoyancy of the first-time buyer’s segment remains a key driver of the property market.
“Despite recent hikes, interest rates are still at comparatively low levels, and with house price growth likely to be tracking below average wage growth in the short-term, there are still good opportunities for first-time home buyers to get onto the property ladder,” explains Dyer.
Bond approval stats
The average approved bond in July was R830 549 which is 7.7% higher year-on-year and 1% lower month-on-month. The average approved bond for first-time buyers in July was R687 453 which is 10.2% higher year-on-year and an increase of 3.7% month-on-month. The growth in bond size dovetails with the trend in lower deposits. The average deposit decreased significantly year-on-year by 21.9% and month-on-month by 8.1%. The average deposit as a percentage of purchase price in July was 11.4%. Ooba has also reported a new high in the value of home-loan approvals, with the value of home-loans approved through ooba in July up 9% from July last year and up 15% month-on-month.
According to Dyer, this is the best monthly performance recorded since November 2007. All the above indicate that now is an excellent time to buy. Banks, it seems, are more open to the idea of lending money to buy a home and the fact that the sum required for a deposit is also decreasing can only be good news for buyers, particularly those entering the market for the first time.