Rawson Property Group says home buyers now stand a much better chance at getting better mortgages as approval statistics show that 60% of loans were granted as of March 2018.
In 2017, the average approval rate of mortgages was a much lower 47%.
The property group’s Western, Southern and Eastern Cape regions hit at an average approval rate of 73%.
Banks are offering more favourable rates, are more open to 100% bonds and have also been considering applications from a wider pool of candidates than they have before. Rawson noted that banks have settled into a comfortable middle-ground between the overly lenient pre-National Credit Act days to the much more cautious post-National Credit Act crack-down.
This improved lending appetite has also played a role in influencing consumer confidence, and banks are becoming increasingly willing to lend the full value of a property, without requiring a deposit.
After the market fluctuations and economic instability in 2017, the stabilisation of 2018 is reenforcing buyer interest and stimulating much-needed investment activity.
Consumers also appear to be managing their debt better, and the current low-interest rate lending environment, coupled with slower growth in property prices, means getting a bond for your home is more affordable than it was even a year ago.
In the first financial quarter of 2018, the average deposit price for first-time buyers as a percentage of purchase price is 12.5%. The same percentage of purchase was 14% in the first quarter of 2017.
The average deposit over the entire market has declined by 6.4% year-on-year.
Although Cape Town properties are currently in a buyer’s market phase, these trends also have a positive advantage for homeowners who are struggling to sell their properties, as the pool of potential buyers has increased.
Although there are still corners of the market that remain under pressure, both buyers and sellers are expected to benefit from this improved market activity.