FIRST-TIME buyers are making a steady return to the residential property market, a study by South Africa's bond originator, Ooba, revealed yesterday.

The research revealed that in 2010 the proportion of first-time buyers as a percentage of total applications increased to 47,61percent. This is the highest total since Ooba began tracking the statistics and is a 15,95percent increase on the proportion of first-time buyers since these records began in July 2005.

Saul Geffen, chief executive of Oooba, said the change in profile of home buyers would signify a positive development for the local housing market.

"Higher levels of activity among first-time buyers are generally a positive indicator for the housing market since demand increases and there are positive knock-on effects," Geffen said.

He said a factor in the increased proportion of first-time buyers would be the reduction in the number of property investors.

"With capital growth having been curtailed, and buy-to-let investors having fallen away, the relative proportion of first-time buyers would naturally increase," he said.

Geffen said the reduction in interest rates of 650 basis points since 2008 would also have been a contributing factor to the increase in first time home buyers.

"With rates now standing at a 30-year low, improved affordability has enabled many would-be homeowners to take the leap since the cost of servicing a bond has been reduced considerably," Geffen said.

"This, combined with the easing in lending conditions, relatively low property price growth compared with recent years, low inflation rates and some real wage growth, combine to make this a favourable environment for the first-time buyer to get on to the property ladder."

Geffen advised that possible first-time buyers should aim to put down a deposit as those who do so are more likely to get their home loan approved and also obtain a more favourable interest rate on their bond.