First-time home buyers spending more

2011-08-17 11:42

First-time home buyers are spending more on a property than they did a year ago, according to bond originator Ooba.

The July first-time buyer’s purchase price figures show year-on-year growth of 3% to R609 417 Ooba said in a statement.

“Higher levels of activity amongst first time buyers are generally a positive indicator for the housing market, as demand increases and there are positive knock-on effects,” said Rhys Dyer, Ooba chief operating officer.

He said the average first time buyer’s purchase price had grown consistently in the past quarter, due to low interest rates and an easing of lending conditions, especially for deposit requirements.

However, the overall price index recorded negative year-on-year price growth of 3.4% to R821 579 in July this year from R850 763 in July last year.

Of home loan applications, the 49% that were finalised by Ooba from January to July this year were for first-time home buyers, which was up 2% from the same period last year.

There had been an almost 1% increase in the average approved bond size to R702 072 in July from R696 903 a year ago.

The average deposit had decreased by 20% to R119 507 and was now equivalent to 15% of the purchase price.

This was a sign of banks’ improved lending appetite, said Dyer.

The average bank decline ratio at 47% and the effective approval rate of 64% were at similar levels to the June numbers, indicating little month-on-month change in bank approval rates.

Dyer said that in July, the ratio of applications declined by one lender, but granted by another stayed at 23%.

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