Ooba Report Shows Housing Growth Rate is Slowing

November 19 - The growth in residential housing in South Africa was much slower compared to the strong first half of 2010, according to the latest report released by bond originator, Ooba.

"South Africa's residential property market is continuing to experience a moderation in price increases, in line with the slower economic growth predicted for the overall economy in the third quarter," said ooba in a statement.

Ooba's report showed that growth was much slower in October 2010 than it was in the same month a year ago.

The average house purchase price climbed by 1.4% to R832,705 year on year. This was up from R820,885 in October 2009.

Saul Geffen, the Chief Executive Officer of ooba explained the reasons for this slower growth.

"We witnessed strong levels of growth in residential property prices in the first half of the year despite continuing tough economic conditions, so it is not surprising that price inflation is tapering off," he said.

In terms of home loans, ooba statistics showed that the approval rate for bond applications increased by 8% to 67.6% year on year.

"This approval rate is considerably up from the lows experienced over the past few years and is a clear indication that lenders are more confident about the property market and the prospects of economic recovery," said Geffen.

He also said that it demonstrates the importance of shopping around if a loan application is declined as there is a "30% chance that you will be approved by another lender."

The average approved bond size decreased 1.2% to R681,213 from last October.

11/19/2010 10:35:22 AM