More home loans approved and self-employed buyers

Property statistics for the second quarter of 2015 released by ooba, national bond originator, show strong growth in property prices and positive trends in home loan lending conditions.

The average property purchase price of R1 054 691 recorded in Q2 is up by 11% from R950 507 in Q2 of 2014. Similarly, he says the average purchase price of first-time home buyers grew by 7.8% quarter-on-quarter to R795 427.This is according to Rhys Dyer, ooba CEO, who says demand for property in certain areas remains resilient, which, when coupled with shortages in supply of properties for sale in many areas, continues to drive prices higher.

“However, given slower economic growth, the expectation that interest rates will start rising in the second half of 2015, and with the consumer confidence index indicating a more cautious approach by consumers to spending, it is expected that we will start to see a moderation in property price growth in the second half of 2015.”

ooba’s total approval rate in Q2 2015 was 75.3%, up by 4.9% on the approval rate recorded in Q2 2014. The average interest rate in Q2 2015 was prime plus 0.31%, which is a 28 basis point improvement on Q2 2014’s average interest rate of prime plus 0.59%.

“Increased competition amongst lenders is evident in these higher home loan approval rates and more favourable interest rates,” he says.

“Furthermore, the value of home loans secured by ooba in Q2 2015 grew by over 10% compared to Q2 2014.”

Dyer shares home buyer trends that were identified in ooba’s latest quarterly statistics:

- A mild slowdown in first-time buyer activity has been recorded. Of all applications received by ooba in Q2 of 2015, 52% were from first-time buyers compared to 54% in Q2 of 2014.

- The market for buy-to-let and holiday homes is still subdued. 96% of applications to ooba in Q2 of 2015 were for the purchase of primary residences. This is unchanged from Q2 of 2014.

- An increase in self-employed applicants has been recorded at 11% of total applications in Q2 2015, up from 9% in Q2 of 2014. Although nowhere near the 20% level experienced in 2007, the increase does indicate that self-employed applicants are more confident about the property market as well as their ability to qualify for finance.

Dyer says using a bond originator gives buyers a better chance of getting their home loan approved in the shortest possible time. 

“As competition amongst lenders increases, it is even more advantageous for home buyers to use a bond originator to get the best deal.”