Home loan approvals showed a 50% year-on-year increase during May according to statistics from bond originator Ooba. Saul Geffen, CEO of Ooba, said this was the best monthly performance recorded since April 2008. He added that May’s approvals were 221% up on Ooba’s lowest approved loans month, being January 2009, but still only 32% of its peak month in May 2007.
The value of Ooba’s applications in May was 20% higher than the same period last year and 36% higher than April 2012. The company said the statistics showed that the number of people applying for home loans is increasing, but added that this was outpaced by the value of home loans approved and was the result of improved lending conditions and increased bank competition.
Geffen said that in comparison to the company’s historical best month, May 2007, applications are 45% of the peak levels. He added that May’s statistics reaffirm the increase in first-time buyer activity and that lending conditions are easing slightly. “The consistent increase in applications and approvals over the past month is a positive indicator for the property market. There seems to be a marked increase in consumers’ sentiment and appetite for residential property and this has been underpinned by improved access to finance,” he said.
Last week the company issued figures showing that residential property prices increased year-on-year by 6.5% in May. May was the seventh consecutive month Ooba recorded an increase in residential property prices. The Oobarometer price index revealed that the average house price rose to R 869,088 from R 816,317 a year earlier. The average purchase price among first-time buyers also showed a significant year-on-year increase of 5.4% to R 645,458, from R 612,489 recorded in May 2011.