"This is the fifth consecutive month that the oobarometer has shown a rise in house prices and it is the biggest increase within that period," according to the chief executive of ooba.
The average purchase price according to the oobarometer was R820,885 last month compared to R746,654 in October 2008. The month-on-month purchase price also shows a nominal increase of 1.8% from R806,494 in September this year.
The average purchase price for first time buyers has also shown a large year-on-year increase of 10.7% and a month-on-month increase of 3.7%.
The drop in interest rates and banks loosening their lending criteria, has also positively affected the affordability of first time buyers and we are seeing an increase in activity from first time buyers.
The year-on-year average approved bond size has increased by 8.9%, from R636,339 in October 2008 to R693,008 in October 2009.
The average deposit as a percentage of purchase price, has increased slightly in October, to 15.6% compared 12.5% in September, but is still considerably lower than the 23.1% in August this year. The change to lower deposits is a permanent shift as a result of relaxed bank requirements; however the changing mix of business will continue to fluctuate the monthly data for some time.
The average bank decline ratio is slightly up at 49.6%, compared to 48.4% in September. This slightly higher decline rate should be understood in the context of the significant increases in application volumes, rather than increases in bank rejections. Despite lenders having generally increased approval rates, a higher proportion of applications are now not being approved due to an increase in the proportion of marginal applicants who are trying to take advantage of the improved lending environment, particularly 100% loans which have stricter criteria to fulfill.
18.6% of applications which were initially declined in October were subsequently approved by another lender, which is marginally lower than September's ratio of 19.5%. This should also be seen in the context of the increased application volumes.
The outlook for the property market stays positive, with all important drivers such as increased application volumes, increased approvals, further relaxation of bank lending criteria and increased competitiveness amongst lenders indicating that the improvement in the market will be sustained. No better time to buy than now.
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