Published: 9th September 2013
A statement released on Friday from Ooba, the leading South African property bond specialist, has shown a large increase in the number applications and approvals for South African property Bonds in the last three months. The figures for June 2011, showed an increase of over 50% when compared with bond applications for the same period the previous year. With the figures for April and May being 48.5% and 47.1% respectively, the news was a boost for the South African property market.
Ooba CEO Saul Geffen said ooba had recorded consistent month-on-month increases in home loan applications since the beginning of 2011. The figures went on to show that last month was also the highest month for over three years for the value of approved home loans. Geffen went on to state that the figures were a result of the low interest rates in the South African property market, which were leading to more positive market conditions across the country. "The reduction in interest rates of 650 basis points since 2008 has improved affordability and reduced the cost of servicing a bond significantly.
"The record low interest rates, coupled with subdued property price inflation, increased bank approval rates, and lower deposit requirements, has resulted in an influx of applications by potential homeowners."
The news is a boost for the South African property market, which is also benefiting considerably from the fact that the major lenders have also continued should relax their criteria on applications for home loans. As well as the increased number of applications, approval rates still relatively high, a 63.4% in May 2011, up from 55.6% in May 2010.