Johannesburg, South Africa Photo: Derek Keats
The lender says that the country enjoyed “slow but steady” recovery last year, thanks to low interest rates, affordable house prices and strong confidence from lenders.
“Simply put, residential properties are still priced appealingly, low interest rates make repayments affordable and banks are more willing to lend money to prospective home owners,” explains Rhys Dyer, CEO of ooba .
Indeed, banks have been approving bonds with lower deposits than in 2012, notes oobs, with buyers offered a 14.66 per cent deposit in 2013 compared to 15.22 per cent in the prevous year.
“While banks are now more prepared to lend at lower deposits, with the availability of 100% bonds becoming more common, it is important to note that any prospective home owner’s best chance of securing a bond is still saving up for the biggest deposit possible,” says Dyer.
The majority of homes bought last year were by first-time buyers, as market conditions improved.
“We expect this trend to continue into 2014,” adds Dyer.
Prices grew 5.6 per cent year-on-year, but demand up and building activity staying flat, estate agents who previously had an oversupply of properties are now reporting stock shortages, which is expected to push prices up even higher in 2014.
Nonetheless, the bank remains confident in the market’s potential for the coming year.
“Although reduced levels of supply may drive increased prices, we believe the improved lending criteria and still low interest rate environment, will contribute to ongoing positive growth in the number of property market transactions in 2014,” says Dyer.
“Overall, the South African property market ended strongly in 2013, and it is anticipated that 2014 will be another year of positive growth.”