October oobarometer indicates 9.9% year-on-year increase in house prices

Posted On Tuesday, 17 November 2009 02:00 Published by eProp Commercial Property News
Rate this item
(0 votes)

This represents the fifth consecutive month that the oobarometer has shown a rise in house prices and it is the biggest increase within that period.


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,” says Saul Geffen, chief executive of oobarometer.

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 fulfil.

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 is 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,” concludes Geffen.

Last modified on Monday, 10 March 2014 18:19

Most Popular

Investec Property Fund launches first REIT sustainability-linked ESG bond in Africa

Apr 22, 2021
Investec Property Fund (‘IPF’ or ‘the Fund’) today became the first South African real…

EPP’s new app takes tenant relations to the next level

Apr 22, 2021
Johannesburg Stock Exchange listed EPP, Poland’s biggest retail landlord, continues to…

4 simple rules to getting a good credit score

Apr 21, 2021
Make buying your dream home an informed purchase by knowing your credit score.

Rethinking office space in post pandemic SA

Apr 20, 2021
Since the beginning of the pandemic, one of the biggest questions in real estate has been…

Still time to bond as economist says modest interest rates hike likely only in 2022

Apr 16, 2021
After the five aggressive repo rate cuts last year that dropped the prime lending rate to…

Please publish modules in offcanvas position.