The average deposit required by home buyers is now 12% of the purchase price, down 20% year-on-year from 15.5%.
This is according to bond originator, ooba, whose CEO Rhys Dyer, said banks were continuing to compete strongly with each other to make loans more accessible and affordable.
“The approval ratio in ooba’s Q4 2018 statistics shows that bank approvals increased by 8% year-on-year, to 80%, while the average interest rate has decreased,” said Dyer, noting that there was good news for first-time and repeat buyers. “Some 80% of our 100% bond applications in Q4 2018 were approved, compared with 72% in Q4 2017. While applications to ooba by first-time buyers increased by 3% year-on-year, our 100% bond applications showed an almost 7% increase over the same period.
“Although this is indicative of the demand for 100% bonds from first-time buyers, we are also seeing more second-time buyers successfully applying for 100% bonds. Buyers are finding it increasingly difficult to raise a deposit due to the challenging economic conditions and banks are more prepared to offer customers 100% bonds.”