Dreams come true for homebuyers as the market ends year on a high

THE real estate market has ended last year on a strong note, with billions of rands’ worth of new home loans having been granted and many thousands of buyers happily settled into their new homes.

“Home values also continue to rise and the percentage of loan applications that are turned down outright continues to decline as the banks pursue new mortgage business, so there is definitely room for optimism,” says Shaun Rademeyer, CEO of BetterBond Home Loans, South Africa’s leading mortgage origination group.

According to the group’s latest statistics, it secured home loan approvals worth some R36,5 billion for more than 48 000 home buyers in the 12 months to end-November, with the largest percentage of loans (39%) being granted in the R500 000 to R1 million category, he says.

“What makes BetterBond Home Loans especially proud, though, is that almost half (48%) of those loans went to first-time buyers, who were thus able to realise their dreams of home ownership this year and start laying the foundations of wealth creation for themselves and their families.”

The BetterBond figures show that the average home purchase price in its portfolio rose 5,42% year-on-year in November to R917 641.

The average purchase price for first-time buyers grew 3,94%to R643 372.

At the same time, however, the percentage of purchase price required as a deposit declined to 16,64% on average, and to an average of 8% in the case of first-time buyers, which meant that buyers required less cash to be able to complete their transactions.

What is more, the percentage of home loan applications being declined outright dropped to 30% in the year to end-November, compared to 34% in the previous 12 months, which in an indication of an improved level of creditworthiness among prospective borrowers.

“However, the percentage of applications declined by one bank but then ‘rescued’ by BetterBond and approved by a different bank remained at 37,5% in the same period, which once again underlines the advantage in applying for your loan through a reputable originator like BetterBond, even if you think your finances are in good shape and the banks are in a lending mood.

“In the past 12 months, more than half the applications that made it past the initial cut would also have failed were it not for our willingness to motivate individual applications and, if necessary, submit them to a second and sometimes even a third lender,” says Rademeyer.

“As it is, we were able to ‘rescue’ some R17,8 billion worth of applications for more than 24 000 very happy buyers, and maintain our record of ensuring approval for three out of every four applications that are put into our hands.”