Repeat buyers gain ground

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.