BetterBond
The July BetterBond Property Brief is out, here are the highlights:
Average home loan values
The brief shows that despite home loan application volumes coming down during the current Reserve Bank rate-hiking cycle, average home loan values have held their own. Compared to the previous 12-month cycle, the average home loan granted for all buyers was unchanged, and for first-time homebuyers declined only marginally (by 2%).
The average home loan for all buyers is currently just below R1.2 million, and for first-time buyers marginally above R1 million. This means the latter group of homebuyers is maximising the government’s increased transfer duty threshold, which was moved up to R1.1 million in February 2023.
Month-on-month % change in share of home loan grants per price bracket (May 2023 to June 2023)
Between May and June this year (figure 2), the share of home loans granted for properties costing less than R1.5 million has increased, while buying in all price brackets above R1.5 million has decreased. The biggest drop has been for homes priced above R3 million.
Home loans granted, per region (12 months to June 2023)
During the 12 months to June 2023, Gauteng continued to dominate home loan financed buying, with BetterBond’s Greater Pretoria and two Johannesburg regions accounting for more than 50% of all home loans granted, to all buyers (figure 3) and first-time buyers (figure 4).
In terms of both groups of homebuyers, the Western Cape and KwaZulu-Natal recorded the next best levels of activity, respectively.
Average deposit amount for home purchases
When the cost of servicing debt increases at the pace at which it has been over the past 18 months, banks understandably become more cautious about borrowers’ ability to repay their debt.
That is why we have seen a predictable increase in the average deposit required to purchase a home – especially for first-time buyers, who are younger, on average, than all buyers, and often do not command the same levels of income.
For first-time buyers, the average deposit required has virtually doubled to a level of R155,000 over the past six quarters (figure 5).
