Standard Bank's house price index for November shows that South Africans in lower and middle income brackets are holding off on applying for home loans, and those that have, are struggling to qualify.
"Middle and low income individuals probably find the property market a daunting place," the report said.
The Standard Bank median house price index, calculated on a five-month moving average, recorded an increase of 1,9percent year on year in November, following a decline of 3,1percent year-on-year in October.
The jump is not because house prices are rising. The Standard Bank house price index uses the median house price - the middle value in the range of prices arranged from highest to lowest.
Standard Bank's residential property book for November shows fewer lower priced properties in the November data, while the number of higher priced properties on its loan portfolio increased, which is why the median price for the month was higher.
"The number of successful applications in the lower price end has declined quite substantially," said Standard Bank senior economist Johan Botha.
However, Standard Bank said interest rates could be cut early next year, with further cuts anticipated in the rest of 2009, which would help a recovery in the economy and the property market by the end of next year.