Real Estate Investor June 2021 June 2021 | Page 28

He says , approval ratings remain elevated when compared to prior years , suggesting that the aggressive interest rate cuts in the first half of 2020 have ensured that more applicants are now eligible for a mortgage than was previously the case .
for mortgage extension by local financial institutions ,” he says .
Dr Golding says double digit growth in house prices was last recorded briefly in 2010 and again in 2015 / 16 . He says the current robust growth in average and first-time home buyer prices is similar to the surge in prices in the wake of the global financial crisis and subsequent recession . However , a key difference is that , during the global financial crisis , house prices were actually declining from year-earlier levels , prior to the 2009 / 10 recovery in prices .
“ Given the weak state of the South African economy prior to the onset of Covid-19 , the current strong growth in house prices ( both average and for first-time home buyers ) is undoubtedly attributable to the aggressive interest rate cuts last year and a strong appetite
According to Pam Golding Properties ’ senior research analyst Sandra Gordon , Ooba data shows that the average price paid for a home by first-time home buyers has grown at a faster pace than the increase in the overall average price paid since 2016 .
“ This trend has continued into 2021 , with increases in house prices continuing to record double digit growth rates ,” she says . ( See chart below )
“ Encouragingly , the smoothed percentage of mortgages extended to
26 JUNE 2021 SA Real Estate Investor Magazine