Lockdown and low interest rates drive huge growth in home loan applications, according to home loan experts Ooba.

 Rhys Dyer, CEO of Ooba, says: "After extremely low business levels in April and May, we received a flood of home loan applications in June, up 51% compared to June 2019. This high level of activity has continued into July, with volumes in July up over 60% on the same period last year."

He says the majority of the activity in the market appears to be focussed in a specific price band, with applications in the R750k to R2m price band showing the highest demand.

Rhys says from a home loan perspective, this is a particularly appealing time to acquire property. Since January 2020, the prime lending rate has dropped by an unprecedented 27.5%, from 10% to 7.25%, with the potential for additional rate cuts before year end.

 "Buyers who previously could not afford a home are entering the market for the first time due to lower interest rates. In June, Ooba's ratio of home loan applications from first-time home buyers increased by 12%."

 He says first-time home buyers are also taking advantage of the cheaper finance to buy more expensive properties. 

"This can be seen in the 5.6% year-on-year increase in the average purchase price of first-time buyers for the second quarter. Looking at June 2020 statistics alone, the first-time buyer's average purchase price was 13% higher than in June 2019."

 This surge of first-time buyers into the market saw the average age of Ooba's applicants drop from 38 in Q1 20 to 37 years old in Q2 20.  June 2020 statistics show that the average age has already dropped even further to 36 years old.

Author: Industry News

Industry News