House prices continued to drop during April despite this year's 300 basis points interest rate cut by the Reserve Bank.
In February the bank cut the repurchase rate by a full one percent from 11.5percent.
Interest rates were cut again in March and in May by another one percent each time in an effort to ease pressure on consumers struggling to meet their bond repayments and control inflation.
According to Ooba's April oobarometer price index, house prices recorded a 2,8percent drop in year-on-year house prices.
This was a slower rate of decline than the March's 4,2percent fall but it still indicated a market under pressure, according to Saul Geffen, chief executive at Ooba.
The average purchase price, according to the oobarometer, was R767769 in April this year compared with R789712 in the same month last year.
It was a one percent drop from the March 2009 average purchase price.
This has been a function of constrained household disposable income and the increasing reluctance of banks to grant loans.
"The bank decline ratio continues to hamper the property market as banks' strict lending policies vastly reduce the opportunities for home buyers to qualify for home loans," Geffen said.
The average decline ratio in April was 57,4percent compared to 44,9percent in April last year.
Only 17,1percent of applications declined by one lender are approved by another lender this year compared to 39,3percent last year.
"But we believe banks will soon begin to relax their restrictive lending policies and that, coupled with improving affordability thanks to lower interest rates, the property market will start to recover later this year and into 2010," Geffen said.