The average home purchase price showed a year-on-year increase of 11.6% at end-February, and now stands at R882 000, according to the latest statistics from BetterBond.
These figures also show substantial year-on-year increases in both the number and value of home loan approvals, with BetterBond achieving a massive 12.6% increase in its home loan approval ratio to 76.6%.
“We secured more than 52 000 home loan approvals with a total value of R38.3-billion in the 12 months to end-February, compared to 49 000 approvals valued at R34.5-billion in the previous 12 months,” says group CEO Shaun Rademeyer. “This shows continued healthy growth in the residential property market, with prices rising in response to higher demand from prospective buyers as well as the higher rate of bond approvals, which enable more of those purchasers to actually buy the homes they want.”
This positive trend is underlined, he says, by the fact that the initial decline ratio for home loan applications made through BetterBond has dropped by almost 19% in the past 12 months, while both the number and value of ‘rescued’ applications (those declined by one bank but approved by another) have risen substantially. “Indeed, of the R38.2-billion worth of applications approved in the past 12 months, some R18-billion worth were applications that were ‘rescued’ because we were able to submit and motivate them to multiple lenders.”
The average bond amount approved showed a year-on-year increase of 4% at the end of February to R740 000, with the average percentage of purchase price required as a deposit staying virtually static at just under 19%, says Rademeyer.
And there is still strong activity in the first-time buyers’ sector, he notes, although the percentage of applications being made by such buyers has declined, year-on-year, from 53% of the total to 48%, “Probably in response to a drop in the number of 100% (full purchase price) home loans being granted and the simultaneous substantial increase (7.7%) in the percentage of buyers being asked to pay a deposit of at least 10% of the purchase price.”
The average deposit required of first-time buyers over the past 12 months has, in fact, been 10.6% of the purchase price, while the average home purchase price in this sector of the market has risen 8.4% to R628 000, thanks mostly to the fact that new development is still lagging demand.
