ooba, South Africa’s biggest bond originator recorded a 4.6% growth in the average house price from R868,174 in February 2012 to R908,658 in February 2013. ooba continues to report record results building on the highs set in the last quarter of 2012. The value of home loans approved through ooba in February 2013 was up 23% on February 2012. The value of home loans approved recorded in the first seven months of ooba’s current financial year beginning 1 August, was 37% up on the same period last year.
First-time home buyer activity continues to drive the market, with nearly 52% of ooba’s applicants in February being first time home buyers. The average house price for first-time buyers was up 5.4% year on year to R698,721 and up 1.8% month on month from R686,452 in January.
“We continue to see high levels of activity in this market segment. It is a good sign and encouraging to see that a large proportion of buyers are in their early thirties and are keen to purchase their first home while market conditions are favourable,” says Saul Geffen, ooba CEO.
Despite the high number of first-time homebuyers, the average home loan deposit dropped substantially by 14.2% year on year and 7.3% month on month to R125,843, representing only 13.9% of the average purchase price.
“The slight relaxation in deposit requirements of the last few months has been positive for home buyers, as coming up with the funds for a deposit remains one of the major hurdles to obtaining home finance,” says Geffen. “It is also an indication of market competitiveness and confidence, as banks gradually ease lending criteria.”
The average approved bond size increased 7.6% to R782,815 in February this year from R727,489 in February 2012.
The average initial bank decline ratio decreased 4.6% year on year and 2.4% month on month to 43.6% in February. The percentage of applications that were declined by one bank but approved by another improved significantly to 28.7%, up 5.9% year on year and 3.2% month on month.
ooba’s effective approval rate, which is the overall percentage of loans approved once ooba has shopped the loan to multiple banks, was 68.9% in February, 6.1% up on February 2012, while ooba’s trailing approval rate, which takes into account loans approved after month-end, is currently 74.3%.
“This means that ooba currently obtains approval for 74% of all home loan applications it facilitates, which compares favourably with the average bank approval rate of 54% across the major lenders. Essentially, homebuyers have a 37% better chance of approval when using ooba,” says Geffen.