Positive market sees house prices rise

It’s a good time to be a home owner, whether you are looking to put your property on the market, or looking for property for sale to enter the market.

There has been increased optimism in the market in recent months, which has seen the banks showing increased willingness to approve home loans – and this knock on effect means that house prices are growing faster than they were a year ago.

This turnaround started in December, according to Rudi Botha, CEO of BetterBond. In fact, he points out that the year-own-year growth is over 5% when looking at the average home price as of the end of April – a steady climb which follows on from the growth of just under 3% YoY in the first three months of the year.

This change means that the market is slowly moving in favour of the sellers. This was also evident after a recent estate agent survey from FNB, which showed that the average time on market had dropped from 17 to 14 weeks, while sellers having to drop their price to make the sale had also declined from 95% to 91%.

There are two major reasons behind this, with greater demand being one, and the fact that more home loan applications are now being approved being the other. Botha revealed that over the last four months, they have had an approval rate of 80%, which was the highest sustained rate since the recession in 2008/09.

The rising prices will also encourage the banks even more, but he did warn that this is not really a snapshot of conditions across the board in South Africa, saying that in some areas it can change month on month, and that in some regions it is harder to secure the finance. This was evident with YoY growth in the Western Cape and Eastern Cape in April, but a decline of 2.6% in Gauteng.

Taking all of this into consideration, if you are on the fence about entering the market at either end of the spectrum currently, it may be time to dip your toe in.