Dreams are a reality for thousands of home buyers

THE PROPERTY market ended the year on a strong note, with billions of rands’ worth of new home loans being granted and many thousands of buyers happily settled into their new homes.

“Home values also continue to rise and the percentage of loan applications that are turned down outright continues to decline as the banks pursue new mortgage business, so there is definitely room for optimism,” said Shaun Rademeyer, chief executive of BetterBond Home Loans.

According to the group’s latest statis- tics, it secured home loan approvals worth about R36.5bn for more than 48 000 home buyers in the 12 months to the end of November – with the largest percentage of loans (39 percent) being granted in the R500 000 to R1 million category.

“Almost half (48 percent) of those loans went to first-time buyers, who were able to realise their dreams of home ownership this year and start laying the foundations of wealth creation for themselves and their families.”

The BetterBond figures show that the average home purchase price in its portfolio rose 5.42 percent year-on-year in November to R917 641, and the average purchase price for first-time buyers increased 3.94 percent to R643 372. At the same time, however, the percentage of purchase price required as a deposit declined to 16.64 percent on average – and to an average of 8 percent in the case of first-time buyers – which meant that buyers required less cash to be able to complete their transactions.

Rademeyer said the percentage of home-loan applications that were declined outright dropped to 30 percent in the year to the end of November, compared to 34 percent in the previous 12 months, indicating an improved level of credit-worthiness among prospective borrowers.

“However, the percentage of applications declined by one bank but then approved by a different bank remained at 37.5 percent in the same period, which once again underlines the advantage in applying for your loan through a reputable originator, even if you think your finances are in good shape and the banks are in a lending mood.

“In the past 12 months, more than half the applications that made it past the initial cut would also have failed were it not for our willingness to motivate individual applications and, if necessary, submit them to a second and sometimes even a third lender.

“As it is, we were able to ‘rescue’ some R17.8bn worth of applications for more than 24 000 very happy buyers and ensure approval for three out of every four applications that are put into our hands,” Rademeyer said.