SECOND-TIME HOME BUYERS ENJOY FAVOURABLE HOME LOAN INTEREST RATE DISCOUNTS AS BANKS COMPETE

 Banks continued to compete by offering steep interest rate discounts while also approving more bonds with reduced deposit requirements, resulting in favourable lending terms for home loan applicants.

"The average interest rate reached by the oobarometer for clients was prime less 0.21 percent, 19 basis points lower than the rate of prime less 0.02 percent in Q4 2020," says Rhys Dyer, CEO of ooba.

"Our data also shows that second-time home buyers, who, unlike first-time buyers, have a deposit, get even better interest rate savings." The average interest rate achieved in this segment during 2021 was prime less 0.42 percent. These figures demonstrate that banks are selling their products more inexpensively, which boosts approval rates."

"Our bank approval rate for Q4 increased by 3.1 percent year over year, demonstrating this." According to the oobarometer, the percentage of applications that are denied by one bank but authorised by another has improved by 1.6 percent. In Q4 2021, nearly half of all applications that were first denied by one bank were later approved by another, demonstrating the value of using a home loan comparison service to shop around for the best house loan deal," he says.

The oobarometer's Q4 figures reveal that the property market is in good shape, with the average purchase price up 3% year on year to R1 389 715 at the end of 2021. The average purchase price for first-time purchasers performed even better, rising 4.7 percent to R1 140 749 at the end of the year.

While property price growth has slowed in the last two quarters of 2021, ooba's statistics show a well-above-inflation average purchase price growth of 9.4% in 2021, with an annual growth of 8.3% in the average purchase price for first-time buyers – a clear indication that buyers are taking advantage of lower interest rates to buy larger properties.

During the same time period, the average bond size climbed by 5.5 percent, while the average deposit (as a proportion of the purchase price) decreased by 23.9 percent, indicating that banks are ready to give house loans with more favourable terms, such as lower or zero deposits. In Q4 2021, banks approved 57 percent of ooba's home loan applications without requiring a deposit, which is 4% higher than the zero-deposit lending percentage recorded in Q4 2020.

"We analysed the annual average purchase price growth as assessed by the oobarometer for all purchasers and first-time buyers across all regions, and we discovered some interesting buying tendencies." The largest year-on-year price growth was recorded in the Free State, at 15%. This growth, however, is based on the country's lowest average home price, which broke the million-rand barrier for the first time in 2021 at R1 016 189. According to Dyer, the average house price for first-time home buyers was R891 208.

According to the oobarometer, the average house price in the Western Cape was R1 898 490 in 2021, making it the most expensive in South Africa. Property in the Western Cape, on the other hand, grew at a slower rate of 7% overall and 6% for first-time buyers. Although North West Gauteng had the lowest growth rates, at 5% overall and 4% for first-time buyers, it had the second highest average purchase price, at R1 524 976 for the year.

"Although property price rise in the Western Cape and North West Gauteng has slowed, our data shows that demand for luxury residences worth more than R3 million has increased." This luxury market accounted for 22% of ooba's authorised house loans in 2021, an increase of about 7% since the cost of borrowing reduced dramatically in May 2020."

In terms of the property market in 2022, Dyer anticipates interest rate hikes of 0.75 percent to 1% for the calendar year. He anticipates interest rate hikes to affect property affordability, which will have an influence on demand and, in turn, property price growth, given that each 0.25 percent increase implies an additional R150 per month repayment on an R1 million loan over 20 years. "Even at an 8 percent prime lending rate," Dyer points out, "we are still substantially below the 10% level that prevailed when we entered the pandemic in early 2020."

"As a result, we predict demand for new house loans to decline by between 5% to 8% in 2022, compared to record high volumes in 2021." For 2022, we anticipate a 3 percent to 4% increase in average purchase prices," he says.

"Similarly, we anticipate a shift in buying activity from the lower to the mid market, as demand for house loans at the lower end of the market contracts due to affordability concerns." From an affordability standpoint, the rent or buy decision is projected to shift back toward renting, which might lead to more buy-to-let investment buyers entering the market."

During 2022, Dyer expects continued high approval rates for house loans, with banks competing for new business by offering low or no-deposit lending conditions.

Conclusion

There's no need to be discouraged if your personal loan application is turned down. To boost your chances of loan approval, simply work on improving your credit report and following the methods outlined above. Once you've completed this checklist, you're ready to submit your personal loan application.To find about the best pricing and deals, call our toll-free number +91-9477079053. They'll help you in every way they can. Please contact me at Best Home Loan In India if you have any more. 

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