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Mild slowing in SA house price growth

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Mild slowing in SA house price growth

31 Aug 2015

Property indicators for the month of July released by national bond originator, ooba, point to continued real house price growth in the housing market, although at a milder pace.

“The mild slowing in the pace of house price growth is unsurprising given the challenging local economic conditions, coupled with subdued consumer confidence in a rising interest rate environment,” says Dyer.

This is according to Rhys Dyer, ooba CEO, who says ooba’s Average Purchase Price, increased by 8.8% from R937 512 in July 2014 to the current level of R1 019 556. 

Although still growing at a healthy pace, he says this is a slowdown from the 11% year-on-year increase recorded for the second quarter of 2015.

The Average Purchase Price of First-time Buyers also shows a slower growth rate at 4.5% year-on-year to R764 317 from R731 651 in July 2014, says Dyer.

“The mild slowing in the pace of house price growth is unsurprising given the challenging local economic conditions, coupled with subdued consumer confidence in a rising interest rate environment.”

ooba’s home loan lending statistics, however, continue to point to positive signs in terms of home loan lender competition, he says.

“Indicators of continued lender confidence include a 4% improvement in the year-on-year bond approval rates in July, as well as further improvements in pricing from banks.”

Another aspect that will interest potential home buyers is the year-on-year decrease of the average interest rate charged by banks on approved home loans. In July 2014, the average interest rate charged was prime plus 0.61. In July 2015, the average rate charged was prime plus 0.37.

Dyer says statistics show that ooba secures approvals for more than seven out of ten home loans that it processes, with its July approval rate at 73.2%. 

Buyers can get prequalified, allowing them to search for property knowing exactly what they can afford.

 He says it is advantageous for prospective home buyers to make use of bond origination services, as bond originators can “shop for the best home loan offer” from lenders.

Author: Rhys Dyer, ooba CEO

Submitted 08 Sep 15 / Views 1596