Re­peat buy­ers gain ground

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MORE AP­PROVALS The lat­est statis­tics from Bet­terBond show the home-loan ap­proval rate has risen from 61% in March 2011 to 69% in March this year.

Dur­ing the same pe­riod the aver­age home pur­chase price paid by Bet­terBond clients has fluc­tu­ated, hit­ting a low of R780 000 in Jan­uary last year and spik­ing to R960 000 in Au­gust last year, but has gen­er­ally shown an up­ward trend to reach R905 000 in March this year, com­pared with R786 000 in March 2011 — a 15% in­crease.

How­ever, notes Bet­terBond CEO Rudi Botha, the aver­age de­posit per­cent­age re­quired by lenders has var­ied very lit­tle over the past two years, so the aver­age home loan amount ap­proved has risen from about R700 000 in March 2011 to R738 000 last month.

Bet­terBond statis­tics show that while first-time buy­ers con­tinue to ac­count for a large per­cent­age of home-loan ap­pli­ca­tions, the per­cent­age has de­clined from 48% in March 2011 to 39% in March last year and 36% in March this year.

“It’s clearly get­ting more dif­fi­cult for first-time buy­ers to en­ter the mar­ket,” says Botha. “While the aver­age pur­chase price in this sec­tor has risen about 7.5% in the past two years, the aver­age home-loan amount ap­proved has only in­creased by about 6%, in­di­cat­ing that first­time buy­ers need big­ger cash de­posits to se­cure loans.”

He says the steady in­crease in mid­dle-bracket home prices over the past two years means that re­peat buy­ers now of­ten have con­sid­er­able eq­uity in their ex­ist­ing homes, which helps to pur­chase their next prop­erty.

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