The September oobarometer price index recorded an increase in the year-on-year house prices of 1.8%, says Saul Geffen, chief executive of ooba.
“This is the fourth consecutive month that the index has reported rising house prices and is clear evidence that the market is on the road to recovery,” he says.
The average house price according to the oobarometer was R806 494 last month compared to R791 478 in September 2008. The month-on-month average price has also increased by 1.4% from R795 241 in August.
“There was a surge of 21% in the month-on-month value of approved bonds in September as more people being able to afford bonds and sentiment translated into increased transactions. This was supported by the banks being more willing to lend,” says Geffen.
He says the year-on-year average approved bond size has increased by 8.2%, from R651 707 in September 2008 to R705 744 in September this year. The month-on-month bond size has also increase by 15.5% from R611 026 in August this year.
There has been a substantial reduction in the average deposit as a percentage of price in the month-on-month data and the year-on-year data as banks relax lending criteria and offer 100% loans.
“The main contributor to the significant drop in average deposits as a percentage of price is a result of the shift in banks lending criteria to lower deposit requirements, with all four big banks now offering 100% loans,” says Geffen. “This will support the increased demand for property as the number of transactions continues to increase.”
The year-on-year average deposit as percentage of price shows a 28.9% reduction. Buyers now require an average deposit of 12.5% compared to 17.6% last year. There was a significant month-on-month reduction from an average deposit of 23.1% in September.
The average price for first time buyers was R575 811 in September this year compared to R554 688 in September last year showing a 3.8% rise. This is also an increase of 4.7% from R549 949 in August this year.
The average bank decline ratio shows an improvement and is now at 48.4%, a 3.6% improvement on the previous year’s 52%.
“One of the biggest drivers of a market recovery is bank lending and the banks have been more competitive over the past five months and more bonds have been approved,” Geffen says. “Banks are now targeting non-bank clients and rate concessions are becoming more aggressive.”
