Big jump in bonds for houses priced above R3 million in South Africa

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The positive impact of lower interest rates is still being felt, with BetterBond reporting an almost 10% increase in bond applications for the 12-month period ending December 2021, said chief executive Carl Coetzee.

Of these, the bond’s initiator said 60% of inquiries came from first-time home buyers making the most of the improved affordability. This percentage remains unchanged from the 12 months ending December 2020.

The percentage of applications approved increased by 12.4% year-on-year for December, and the approval rate improved by 2.41%, BetterBond said.

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The total number of officially granted requests increased by 16.6% during this period, which Coetzee said compares favorably to the 12.34% increase reported for the 12 months ending December 2020. The average purchase price of a home has increased by nearly 12% over the 12 months. end of December 2021, he pointed out.

“The percentage of formal subsidies has increased in all price brackets above R1 million, suggesting that the impact of lower interest rates has had a positive impact on the overall market.”

Formal grants for homes between R500,000 and R1 million still make up the lion’s share of BetterBond’s applications for the 12 months ending December last year. However, at 38.8% of formal grants for this period, it has fallen 11% since 2020, Coetzee said.

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Highlighting renewed buyer activity across all price brackets, the percentage of formal subsidies for homes over R3 million has increased significantly, from 4.41% at the end of 2020 to 6.45% at the end of 2021.

Grants for homes between R2.5-3m accounted for 4.3% of all BetterBond grants, up from 3.17% in 2020, and homes between R2-2.5m accounted for R6.64 % of all formal grants, up from 5.57% at end-2020.

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“Those buying houses between R1.5 and 2 million accounted for 13.45% of all formal subsidies, compared to 11.99% reported at the end of 2020. The percentage of formal subsidies for houses from 1 to 1 .5 million rand has remained nearly constant at around 19.9%,” he said.


Read: 9 property trends to watch in 2022 in South Africa, including the hottest areas

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