Johannesburg - Banks declined fewer home loans in April 2011 compared to the same month in 2010, a bond originator said on Monday.
"The ability to obtain financing is one of the biggest drivers in the property market, so the consistent improvements are positive for the market," said ooba CEO Saul Geffen.
The bank initial decline ratio was 8.7% lower year-on-year (y/y), at 45.4%.
The bank effective approval ratio for home loans increased significantly from 57.3% in April last year to 64.4%, ooba found.
Geffen said the strong April approval rates followed record numbers in March, when the approval figure was the highest value of approved home loans since October 2008.
The average deposit size as a percentage of the purchase price decreased y/y by 39.6% to 13.1%, or R108 164.
At the same time, the average approved bond size increased by 3.7% to R715 319 in April 2011 from R689 742 in April 2010.
"The average deposit for April was only 13% of purchase price, which is significantly improved from the levels seen in 2009, and this opens up a considerably broader homebuyer base who can now afford the lower deposit requirements," said Geffen.
The oobarometer price index showed a y/y decline in the average purchase price of 6.5% to R823 483 in April 2011 from R881 044 a year earlier.
The average purchase price by a first-time buyer fell by a more moderate 0.2% y/y to R625 252.
Geffen said the decline in house prices in April pointed to a further period of declining prices, after strong growth in the first half of 2010.
"We anticipate the negative growth trend will reverse shortly after mid-year and show moderate positive price growth for the second half of the year," he said.