Real growth returns

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Mon, 14 Dec 2009 07:20

 

The November oobarometer price index recorded an increase in year-on-year house prices of 6.3 percent.

“We continue to see a positive trend in house price growth. After six consecutive months of the oobarometer showing a rise in house prices, I believe it is fair to say the property market is safely back in positive territory,” says Saul Geffen, chief executive of ooba.

The average purchase price according to the oobarometer was R844 250 last month compared to R794 496 in November 2008.

The year-on-year average approved bond size has increased by 10.1 percent, from R645 942 in November 2008 to R711 419 in November 2009. The month-on-month average approved bond size has also increased marginally, by 2.6 percent, from R693 008 in October this year.

“The increase in both the month-on-month and year-on-year bond size is a function of the increases in house prices and lower deposit requirements,” states Geffen.

The average deposit as a percentage of purchase price is now at 15.7 percent of purchase price, which is substantially down from the 24 percent levels a few months ago. The significant drop in deposit requirements is a positive indicator of bank lending appetite and their expectations for the property market going forward.

Banks have relaxed their lending criteria further during the last few months and are now offering 100 percent bonds once again, providing relief for potential homeowners.

The November average bank decline ratio is at 49.9 percent, which is marginally up compared to 49.6 percent in October.

The ratio of applications declined by one lender but approved by another reflect a year-on-year decrease of 12.5 percent, but a month-on-month increase of 4.6 percent with 23.2 percent of applications declined by one lender subsequently approved by another. The month-on-month improvement in this ratio indicates that there is an improved opportunity now to secure an approval from another lender in cases where the application was initially rejected.

“Increased application volumes supported by improved affordability and increased bank competitiveness has underpinned a recovery in the property market,” says Geffen. “I believe that 2010 will see market conditions continuing to improve, and that increased transaction volumes and price growth will be sustained.”

              What does this mean to us?

Buyers.
I would reccomend buy as soon as you find the right property, don’t wait and think about it. In an upward market buyers tend to buy more quickly.
This is a great investment hence the saying “safe as houses”

Sellers
If you can wait before putting your house on the market, hold on.
We are in an upward market this means you will get more for your house next month than you will this month.

Growth is still slow but I believe it will speed up considerably in the new year with 2010 world cup becoming more of a reality.

There is a massive shortage of accomodation in our country for the expected million visitors and investors will be looking for extra properties to make massive profits from this massive influx of visitors looking for accomodation and paying upward of R1200 per day.

Are you looking for property?
www.jkproperties.co.za