House prices power ahead

The latest statistics released by bond originator ooba indicate a consolidation of the recovery in the property market which began in the second half of 2009.

According to Saul Geffen, CEO of ooba, the monthly trends in the statistics tracked by ooba, which include movements in house prices, approved bond sizes, deposit requirements and bank decline ratios, all suggest that the positive conditions for homebuyers will continue into the second half of 2010.

9.8 percent year-on-year growth

The oobarometer price index recorded a 9.8 percent year-on-year increase in the average house purchase price in July to R850 763 from R775 172, while the average purchase price made by first-time buyers also showed a year-on-year increase of 8.5 percent to R591 643.

The ratio of applications declined by one lender but granted by another showed a continued improvement; up 9.7 percent year-on-year to 29.4 percent of all declined applications. This means that a nearly a third of all declines have the chance of being approved by another lender.

Decline ratio increasing

While the bank decline ratio for July did show a marginal year-on-year increase of 0.5 percent, this is a function of the volume of applications for 100 percent bonds in the current period, which have far lower approval rates than applications with deposits. As the data for the comparative period last year excludes 100 percent loans, which were not generally available from banks at that time, there has in effect been a significant year-on-year improvement in the decline ratio.

The ooba statistics also revealed a 15.7 percent year-on-year increase in the average approved bond size to R685 503, while the average deposit size showed a significant year-on-year decrease, down 17.8 percent to R165 260.

Article from: www.iafrica.com