ooba’s first quarter 2015 results show slowing growth in property prices, but positive trends in home loan lending conditions.
Statistics for the first quarter of 2015 released by ooba, South Africa’s largest bond originator, indicate continued growth in property prices but at a slower rate than the previous few quarters. However the numbers point to positive signs in terms of home loan lender confidence.
The quarterly oobarometer shows a growth of 3.6% in the average house price in the first quarter of 2015 compared to Q1 of 2014. The average house purchase price reached a high of R999,157 in Q1 2015 compared to R964,266 in Q1 2014. This is off the back of a 7.3% year on year growth in the third quarter of 2014 and 5.5% in the fourth quarter of 2014.
Rhys Dyer, CEO of ooba says whilst we are starting to see a slowing in the rate of house price growth, the home loan lending statistics point to stronger competition amongst lenders – this is illustrated by Q1 2015’s lower average deposit, significantly higher approval rates and more competitive rate concessions. These improved trends are expected to continue to positively influence the home loan lending market during 2015.”
ooba’s quarterly statistics shows the home loan approval rate in Q1 2015 reached a high of 75.8%, the highest quarterly approval ratio since the survey began. “This is a significant approval rate, especially when one considers that more than 50% of the home loan applicants were first time home buyers.
This record approval rate is also a function of an improved focus on prequalifying customers before they apply for a home loan, to ensure home buyers have the correct credit profile as well as sufficient affordability to afford the loan. Dyer recommends that home buyers use the services of a bond originator like ooba for prequalification before they are ready to make an offer on a home. “Our free prequalification service incorporates a credit check and affordability rating so that when you make an offer, you can be confident that the banks will approve your bond. This enables prospective buyers to find the house, while we find the money. This is particularly advantageous for first-time home buyers, who made up over 53% of applications received by ooba in the first quarter of 2015,” concludes Dyer.