ooba Reports Positive House Price Growth and Record Approvals

ooba Reports Positive House Price Growth and Record Approvals The latest statistics from ooba, South Africa’s biggest bond originator, show positive year-on-year  house price growth in July of 6.6% to an average purchase price of R902,900.Healthy price growth  was also recorded in the First-time Buyers segment, with an average purchase price of R710,312,  which is an increase year on year of 8.1%. 53% of ooba’s applications in July were from first-time  buyers, almost 2% higher month on month, indicative of the accelerated level of activity in this market. ooba has also reported a new high in approved home loans for July, exceeding its record set in May  this year. The value of new home loans approved through ooba in July 2013 is up 27% on July 2012.  For the seven-month period of January to July 2013, ooba’s approvals were up 24% over the same   period in 2012 and up 227% over the corresponding period in 2009. “Property price growth and higher home loan approval rates continue to positively influence the  property market, ” says Rhys Dyer, CEO of ooba. “There is renewed confidence in the market  and home buyers have more access to credit for home loans, which has been aided by record  low-interest rates.” Other statistics published by ooba reveal that the Average Deposit recorded was up 16% year on  year and 6.6% month on month to 14.6% of the purchase price. “The increase in the average deposit shows that it is in every buyer’s best interest to put down as high a deposit as possible in order to   increase their chances of approval and improve the pricing of their deal,” says Dyer. The Average Approved Bond Size was 4.1% higher year on year. The Initial Bank Decline ratio dropped by 0.7% year on year – an  average of 47.3% in July – while the ratio of applications declined by one lender, granted by another increased by 2.3% year on year  to 29.9%. Dyer says these figures highlight the need for consumers to shop around. “Homebuyers  are assured a higher probability of an approved loan if they apply to more than one bank, a service  that bond originators such as ooba provide for free.” Lenders’ improved appetite for extending credit is visible in ooba’s  higher effective approval rate.  This is the overall percentage of loans approved once ooba has obtained quotes from multiple banks.  The effective approval rate was 66.8% in July, 1.5% higher year on year. ooba’s trailing effective rate, which takes into account loans approved after month-end is currently  75%, showing that ooba is obtaining approval for more than seven out of every 10 home loan  applications it receives. Full oobarometer analysis Indicator Jul 2013 Jul 2012 Change yr on yr (Jul 13 vs Jul 12) Jun 2013 Change month on month (Jul 13 to Jun 13) Avg purchase price 902,900 846,863 6.6% 919,965 -1.9% Avg purchase price of  first time buyer 710,312 657,069 8.1% 694,143 2.3% Avg approved bond size 771,300 740,733 4.1% 794,357 -2.9% Avg deposit (as % of purchase price) 14.6% (R131,600) 12.5% (R106,130) 16.8% 13.7% (R125,608) 6.6% Avg age of applicant 37 37 No Change 37 No Change Avg initial decline ratio (first bank decline) 47.3% 48.0% -0.7% 47.6% -0.3% Ratio of applications declined by one lender but approved by another 29.9% 27.6% 2.3% 28.7% 1.2% Effective approval ratio 66.8% 65.3% 1.5% 66.1% 0.7%