BetterNews // October2013
Kick up a sweat now that
summer is here
www.betterbond.co.za
4 Home loan approval rate rises Highest rate approval since 2009.
7 Summer’s not the time to slow down If you snooze you will lose. Beat your competitors this summer with tips to get you going.
5 Here’s what high-end homebuyers want most
9 International: Bank criteria an everchanging picture
Young buyers are looking for households
Due to the shift in working stances, UK
that fit their lifestyle.
banks now offer self employed people loans.
We are an authorised financial services provider (license number: 24015). Nedgroup Life Assurance Company Limited administers BetterSure. P olicies are underwritten by Old Mutual Alternative Risk Transfer Limited, an authorised financial services provider. BetterSure and BetterQuote are part of the BetterBond group.
11 Spoken from the heart Clients give a word of thanks to BetterBond employees.
We are an authorised financial services provider (license number: 24015). Nedgroup Life Assurance Company Limited administers BetterSure. P olicies are underwritten by Old Mutual Alternative Risk Transfer Limited, an authorised financial services provider. BetterSure and BetterQuote are part of the BetterBond group.
Home loan approval rate rises According to the latest statistics from BetterBond Home Loans, which is SA’s biggest mortgage origination group, its home loan approval rate has topped 80% in the past month – the highest level reached since 2009.
The September figures also show a 30% year-on-year increase in the value of home loan approvals achieved by BetterBond, to R1,7bn a month, says CEO Shaun Rademeyer. “This is partly a function of the increase in the average home price, which our figures show has risen 9,8% in the year to end-September, but also an indication of the effectiveness of mortgage originators, who not only provide potential borrowers with a comparison of the various borrowing options on offer at any particular time, but will motivate their applications individually and submit them to a number of different banks if necessary. “It is worth noting that although the initial decline rate dropped in September, more than half of the home loan approvals that we have achieved over the past year have only been achieved on submission of the application to a second or even third lender.
“Also, the percentage of applications turned down by our clients’ own banks and then approved by a different bank has risen from 13% to 15% in the past 12 months.” Meanwhile the statistics show a 13% year-on-year increase in September in the average size of bonds approved for those who obtained their home loans through BetterBond, and an average decline of 2,4% in the size of the deposit required (see table). The average purchase price paid by first-time buyers rose 5,1% year-on-year to R658 516, while the average approved bond size for such buyers rose 6,7%. However the size of the average deposit required by first-time buyers rose 11,5%, so it was fortunate that the percentage of loans granted for 100% of the purchase price increased year-onyear from 33% to 38%. Most 100% home loans are granted to first-time buyers who fall into the “affordable” or “gap market” category.
Aug ‘11
Aug ‘12
% change YOY
Aug ‘13
% change YOY
Average purchase price
R826 379
R870 454
5,3
R956 166
9,8
Average deposit required
R167 927
R171 940
2,4
R167 799
-2,4
Average firsttime price
R564 084
R626 372
11
R658 516
5,1
Average firsttime deposit
R66 187
R 76 677
15,8
R67 847
11,5
Average borrower income
R35 166
R42 514
21
R45 322
6,6
Average first-time income
R21 443
R28 039
31
R30 986
10,5
% of total applications declined by one bank, approved by another
18,96
42,39
35,28
BetterBond overall approval percentage
46,62
73,07
80,18
Here’s what high-end homebuyers want most The home feature that high net worth individuals (HNWIs) currently value most is an open-plan layout, according to a new survey by Coldwell Banker Previews International and the Luxury Institute. In addition, the survey found, online customer reviews had a much greater influence on HNWIs when it came to choosing an agent than any social medium. While full automation in “smart” homes ranked as the most sought-after feature now among almost one third (32%) of the survey respondents, 39% said an open floor plan was more important to them now than it was three years ago. The next most-wanted luxury features were swimming pools (28%), outdoor kitchens (23%), home gyms (20%), home theaters (19%) and “green” certification (18%). However, features such as staff quarters, tennis and other sports courts, safe rooms, and multiple garages were all ranked by the HNWIs surveys as less important now than they were three years ago.
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And these results reflect the fact that the luxury real estate market is currently being driven by younger buyers, the report says. Quoted on www.worldpropertychannel.com, Coldwell Banker Previews International NRT Betty Graham said the audience for luxury property was growing younger and that wealthy young people were often willing to pay more than buyers aged 55 or older. “Our survey showed that 43% of younger HNWIs were considering purchasing residential property in the next 12 months, compared to 21% of those aged 55 and older. In addition, we found that the younger buyers spent an average of US$2,1m on their most recent purchase of residential property – or about twice as much as their older counterparts. “And this trend toward younger luxury buyers is the main reason for the change in desired home amenities. Whether these younger buyers have young families or are single without children, they are looking for homes that fit their modern, active lifestyle.” Other findings from the report included the fact that 38% of the HNWIs already owned two or more properties and (surprise, surprise) that a whopping 70% of respondents still rank location over any other consideration when buying a new property.
Summer’s not the time to slow down As the days grow longer and warmer, estate agents need to guard against taking things too easy.
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In fact, says successful entrepreneur and author Bill McBean, summer is actually a great time to amp up your business and perhaps even get a jump on those competitors who are coasting towards the end of the year and hoping that the weather will do most of the work for them over the next few months. There is only a quarter of the year left now, which means you should be three-quarters of the way - or more - towards achieving the goals you set way back in January. But if that’s not the case, or perhaps you’d like to get ahead so that January is not the usual financial strain, here are some expert ideas for a “killer” fourth quarter: •
Take a day to go back to basics. Check your results for the year and establish what
has really worked for you (i.e. where most of your listings and sales have come from).
Remember the most powerful way of leveraging your working time is to be very
clear about what you do well, and do more of that. If you know where your best source of
business is, you can increase your exposure to those people.
•
Write down the specifics of what you want to achieve in the next three months and what
actions you think will be necessary to reach your goal. Add 25% to these actions to give
yourself some insurance and draw up a weekly plan of action.
•
For example, your best way to get more business might be to call other business people
that you have been sending customers to all year. Or it might be to do something special
in the areas you have farmed and where your name is known. Or perhaps to put more work
into increasing your online presence and use of technology to reach more people more
quickly and less expensively.
•
Don’t carry passengers. Work steadily to eliminate all non-serious, energy-burning,
time-wasting clients from your database. Spend the time you used to waste on them on
something positive and you’ll already be ahead for next year.
•
Schedule some time for proper relaxation and re-motivation. A burnout from working
flat out without proper breaks would really wreck your success plan.
•
End each day by looking at what you did that was productive, and what you need to do
tomorrow to be more even more effective.
08
International news:
Bank criteria an ever-changing picture
09
It’s not only SA banks that keep changing their qualification criteria for home financing – lenders in many parts of the world are seeking different ways to cut their risks in the face of ongoing worries about the global economy and their own higher costs of borrowing.
In the UK, for example, several smaller banks and building societies have now lowered the maximum age that borrowers can be at the end of their home loan terms. The Financial Times reported recently that some have dropped this age limit to 75 now, while others have lowered it even more to 70 – which effectively means that they can’t give new 20-year home loans to people over the age of 50. And since most of the major banks already have an upper age limit of 65, this is going to put a huge damper on home purchases by anyone who is retired or approaching retirement. What is more, it does not seem to take account of the fact that the number of people working well-past the traditional retirement age of 65 is growing all the time. On the other hand, however, lenders in the UK are setting a great example by being more flexible about lending to people who are self-employed or working on fixed-term contracts. Such buyers have typically struggled to obtain home loans in the past five years, but now more lenders are adapting their criteria to enable them to qualify. These banks, it would appear, have now recognised that there has been a major and probably irreversible shift in the way people work – and that giving loans to self-employed or contract workers is not inherently more risky than giving them to corporate employees who could be made redundant or fired at any time. Figures from the UK Office of National Statistics show that the number of self-employed people in the UK has risen by 10% since the start of the financial crisis, while contract staff now make up 14%. And in June, leading mortgage lender Halifax made its standard mortgage range available through its branches for contract workers who can provide evidence they have been in the same field for at least a year. Borrowers must have a contract where they earn at least GBP500 a day or GBP75 000 gross per year.
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Spoken from the heart Compliment for Liz Botha and Minette van den Bergh I am so grateful that Sonja Bedford of Remax suggested that I use BetterBond as my bond originator. Well!!! It took only two days for bond approval - at an interest rate that I am really pleased with!! Both Liz and Minette assisted me! What a pleasure to deal with such helpful, professional people!!! Minette even stayed at the office late on Friday (30 August) to finalise the bond approval!! I will surely recommend BetterBond to anyone wanting to buy property and needing finance!! Thanks once again to Team Powell of Table View!! Compliment for Nicole Adams: I just want to say thank you for all the outstanding effort you have put into this application for us, you far exceeded our expectations . I will be referring anyone I know that is in the process of applying for a bond to deal with you. Once again I am really thankful for your services. I hope to do business with you in the future. Compliment for Sharon Nortje: Sharon, thanks, I appreciate your quick help and the pre-approval made a difference to the seller. Thank you so much. BetterBond helped me do a deal, once again! Compliment for Bertus Kotze: “I am a first-time home owner and about to embark on the building process. I have never owned property nor did I have any information on the process thereof. Your Vredenburg branch consultant, Bertus was a breath of fresh air to my bond process. He not only guided me but assisted in very important decisions I needed to make. You have a very talented person working for you and he is a great person to share this process with. I highly recommend Bertus in the future to anyone in my network.� Compliment for Wilma Very: It was lovely to receive your e-mail and Paul and I are thrilled with our home in Vermont and looking very forward to retiring there next year. I have your contact details saved and be sure that we will not deal with anyone else if we need future assistance and will certainly recommend you to anyone else that requires a bond. You were a star to deal with and give excellent service! Thanks again for everything.
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Compliment for Lettie Jordaan: We would like to thank you for the professional way you handled our application, the first day we entered BetterBond offices we could feel that we are going to be helped by a professional. You have answered all our question and concerns and when we left, if you can remember I said thank you for getting us a home, and we meant that. We even said that we will be dedicating our home to you, and can’t wait for you to have the first supper with us as a token of our appreciation, the service was so professional and what we liked most it has a humility inside it and that is a plus that we think will make BetterBond to be a competitor in the market it is in. You kept us abreast with where is the application and when can we expect the results and that made us to feel like king and queen, and for that we would like to say a BIG “THANK YOU”. You ARE A TRUE PROFFESIONAL and thank you once more. Compliment for Joanita Santos: I would just like to advise you that our bond has registered yesterday and it is all because of you. Thank you very much for helping us gets our Dream Home. Compliment for Lourdes Ribeiro: Thank you so much for your excellent service. It was wonderful to have someone never too tired to communicate with me, the client up to seven times a day. The entire experience was an absolute pleasure. Thank you for always being positive and professional. I feel as if I have gained another special friend. Compliment for Jenny Venter: I also want to thank you for your assistance, it is sincerely appreciated. Your service was excellent and I will recommend you to everybody who wants to register a bond. I also want to thank you for your advice on the attorneys. Compliment for Elsa Baartman: Dankie vir al jou moeite. Mens kry bitter min mense wat diens lewer soos jy.
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