Home loan applications last month reached their highest level in three years according to mortgage originator ooba. It says that home loan applications in March were up by 36% compared to the average monthly figure for last year.
However, ooba points out that home loan applications remained depressed and were almost 40% lower than those recorded at the peak of the property boom in 2007.
According to ooba, the average price of houses increased from R850 864 last year to 860 492 in the first quarter of this year.
Saul Geffen, ooba’s chief executive says that the results are both surprising and positive because the property market had been floundering for at least two years.
He says that house prices were not expected to rise this year so the increase recorded in the first quarter went against forecasts made by property analysts.
However, Geffen says that it will be necessary to wait until next month to see if the spike in loan applications is a sign that the property market is improving.
Geffen says that the value of home loans granted in March was the highest since October 2008 and the higher value of home loan applications is expected to continue for the rest of this year.
He says that the increase in the number of applications for a home loan may be a result of lower interest rates that make buying a property now particularly attractive for people in the affordable housing sector.
The average size of loans granted by the bank was 7% higher in the first quarter of this year at R725 973 compared with the same period last year.
The average deposit as a percentage of the purchase price dropped by 23,9% to 15,6% equivalent to R134 519.
The average deposit as a percentage of purchase price was 19,9% in February and 14,7% in January.
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