Residential property prices predictons 2012

property market news today- Residential property prices predictons 2012 : Residential property prices are likely to continue to drift sideways this year, impacted by poor economic growth, according to bond originator, ooba.

But ooba chief executive Saul Geffen said with interest rates remaining at historically low levels, which may drop further in 2012, home buyers and home owners would continue to benefit.

Geffen said that 2011's third quarter economic growth figures had confirmed that SA had once again had little real economic growth, which should mean further pressure on the fragile labour market and negative real disposable income growth.

“All of this will lead to limited purchasing power. Whilst interest rate easing is possible, rates are not likely to make a major difference to residential property demand in 2012.

“However, the reduction in interest rates of 650 basis points since 2008 has improved affordability and reduced the cost of servicing a bond significantly. The record low interest rates, coupled with subdued property price inflation, increased bank approval rates and lower deposit requirements, will continue to positively influence the property market.”

Geffen said the current economic climate was the biggest challenge facing the property market. However, there has been consistent improvement in the bank lending criteria in 2011. “The ability to obtain financing is one of the biggest drivers in the property market, so the consistent improvements are a positive indicator for the property market going forward”.

“In addition, ooba has recorded significant growth in the number of applications and approved loans in 2011 and this growth is expected to continue. The rise in applications and approvals are attributed to the continued relaxation in lending criteria by the major lenders as well as ooba's market share growth.”

The company's statistics reveal that the number of bond applications during November 2011 increased by 36% from November 2010.

The statistics also revealed that November was a record month for the value of approved home loans, which increased by 33% in comparison to November 2010. The value of approved loans in November is the highest recorded since May 2008, over three years ago.