Mortgage origination firm ooba has reported its April numbers are showing a year on year 49% growth in the rand value of home loan approvals suggesting that the residential property market is improving
CEO of ooba, Saul Geffen, said this is the company’s best performance since April 2008, but is still only 34% of the value of the approvals ooba recorded in May 2007.
He attributed these increases to increased buyer activity and easier access to finance, as well as ooba’s increased market share. In addition to this, said Geffen, the South African economy seems to be slowly improving. “South Africa’s economy grew at a rate of 3.2% in the fourth quarter of 2011, up from 1.7% in the previous quarter. In addition, we have recently seen an improvement in the job market, which will also impact the residential property market”.
“According to the Adcorp Employment Index, approximately 108 000 jobs were created in March 2012, up from 24 000 in February 2012. This is also higher than the 80 000 jobs created in January 2012 and is the strongest growth witnessed since the 2009 recession. Job creation and security play a big role in whether consumers are able to afford to apply for home loans,” said Geffen.
He added that the growth in home loan approvals could also be attributed to the role played by mortgage originators and main what he characterized as “the value proposition that bond originators offer consumers”.
“Consumers understand that in today’s tough lending environment, using a mortgage originator to apply to multiple lenders significantly enhances the chances of securing a home loan approval. There has been a continuous increase in the number of homebuyers making use of mortgage originators, given originators’ strong value proposition of securing approvals and on competitive terms.”