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Johannesburg - In August home buyers were already paying smaller deposits as a percentage of the purchase price of a house.
At the same time more applications for mortgages were approved.
This positive development is a sign of greater competition between the banks and an increase in their appetite for lending, explains Rhys Dyer, chief operating officer of mortgage originator ooba.
John Loos, home loan division property analyst at First National Bank says this is also the result of greater affordability in light of lower interest rates.
The latest oobarometer shows the average deposit as a percentage of purchase price as being 23.1% (R184 215) in August, compared with 24.2% (R187 950) in July.
At the same time 54.9% of the applications for mortgage loans were approved, compared with 52.7%% in July.
It is expected that an increasing number of applications will be approved in future, following banks' recent relaxation of their lending criteria by adjusting their deposit requirements.
The oobarometer shows that house prices in August were 6.9% up on August 2008. This brought the average purchase price to R795 241, compared with R743 403 the previous August.
Dyer maintains these figures are further evidence that the housing market is over the worst, and that the main driver of the recovery will be banks' lending policies.
Loos believes it will be some time before the straggling residential construction industry starts to benefit from the upturn. The market has an oversupply of houses that are considerably cheaper than new ones.
Danie Hattingh, president of the Master Builders Association of the Western Cape, says the building industry, which is largely dependent on money that banks make available for development, has been seriously affected by the significant decline in building activity.
Hattingh expects that banks' recent steps will play a role in reducing job losses among skilled and unskilled workers in all related industries, and that the building industry will soon also feel the positive effects of banks' new lending criteria.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.