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House prices declined for the fourth consecutive month in June as inflation and high interest rates continued to hit property buyers in the pocket.
The latest Absa House Price Index, released yesterday, revealed that nominal year-on-year house price growth declined by 0,9percent to 3,8percent last month from 4,7percent in May, as affordability became a major concern with bond repayments up nearly 40percent in the past two years.
Jacques du Toit, senior property analyst at Absa, said the June growth rate was the lowest since September 1999, when it was 3,3percent, which brought the average price of a middle-segment house to about R965500.
Ooba, (formerly MortgageSA), the country's largest bond originator, said that first-time property buyers were the most affected, as banks tightened their lending criteria.
Currently only FNB and Nedbank are still granting some 100percent loans, while Absa and Standard Bank now require deposits of between 10percent and 20percent.
Ooba chief executive Saul Geffen said the average price of a property bought by first-time buyers had fallen from R548800 last year to R521600 last month.
"That's a decline of 4,9percent in the past year in the average price paid by first-time buyers. Most of that decline has occurred in the past month with prices dropping from R542400 in May to June's R521600 - a decline of 3,8percent," said Geffen.
He said the average price of all property purchased, which included first-time buyers, had dropped by 1,7percent from R807000 in June last year to R793600 last month.
"Our statistics also show that 50,1percent of all home loan applications were rejected by the banks in June this year, up from 40,3percent of applications in June last year," said Geffen.