Housing review - Second Quarter 2013
Absa - South Africa
House price trends
Although nominal year-on-year house price growth in the middle segment of the market (homes of 80m² - 400m² and priced up to R3,8 million in 2013) accelerated to above the 10% level in the first quarter of 2013, early indications of a moderation in price growth later this year emerged in the first quarter. In real terms, i.e. after adjustment for the effect of inflation, house prices increased in the first quarter of the year after deflating for nine consecutive quarters from the fourth quarter of 2010 up to end-2012.
House price growth in the category for affordable housing remained in positive territory during the early stages of 2013, whereas price deflation in the luxury Home Loans | 4 segment accelerated in the first quarter of the year from late last year.
Trends in house prices continued to be a reflection of property market conditions and related factors, which are affected by a combination of macroeconomic developments, the state of household finances and the level of consumer confidence.
Absa Housing Review 2013 Q2
More bonds being granted, but banks still strict
Iol - South Africa
The average home price showed a year-on-year gain of 9 percent in April to R893 000, according to the latest statistics from BetterBond, South Africa's biggest mortgage originator.
"This reflects the continued upward trend of prices over the past year, despite monthly fluctuations," says BetterBond CEO Rudi Botha, who notes that this growth has largely been driven by an increase in demand, as evidenced by the steady climb in the number of home loan applications being submitted each month. This number is now 9,6 percent higher, on average, than it was 12 months ago.
"In addition, the monthly home loan approval rate now stands at 69 percent of those applications, compared with 61 percent 12 months ago, and what this means, given the higher number of applications, is that the banks are approving more bonds than they were at this time last year," he says.
"Indeed, this tallies with the latest available Reserve Bank statistics, which show a 1,6 percent year-on-year growth in mortgage advances in February, mostly as a result of higher demand in the residential property sector."
Being self-employed means you’re high risk
Moneyweb - South Africa
Your chances of securing a home loan are much slimmer.
JOHANNESBURG - If you’re a self-employed, a freelancer, contract worker, sole proprietor or small business owner, chances are you may have a tough time trying to secure a home loan.
Yvonne Keane-Viljoen, property finance consultant at ooba, says that self-employed individuals will be scrutinised and have to provide more evidence of their ability to pay back a home loan than their traditionally employed counterparts.
Ewald Kellerman, FNB home loans head of sales, explains employed and self-employed individuals are assessed differently for home loan funding, as they pose different forms of risk.
Steven Barker, head of home loans at Standard Bank South Africa, explains that “most self-employed individuals work on a contract basis or part-time basis, and therefore income over a period of time must be measured and verified to support repayment of the loan.” Even though an employed individual can also lose their job, “the ability to define their income, verify it and use it as a source to support repayment is easier than for a self-employed individual,” he says.