CHEAPER houses BUT fewer LOANS
The recent one-and-half percent interest rate cut has improved affordability, but the banks reticence to lend continues to impact on the property market, says the March oobarometer price index.
The oobarometer, the house-price index spearheaded by Ooba, formerly home loan-originator MortgageSA, continued to reflect the downward pressure on house prices.
The index showed a decrease of 4,2percent in year-on-year house prices.
Chief executive Saul Geffen says Ooba expects continued pressure before a slight recovery towards the end of the year .
It says the average house purchase price was R810156 in March 2008 compared to R775559 in March this year.
The average bond size recorded in March was R596903, a 12,4percent drop from the average bond size of R681761 in March last year and a 4,8percent drop in the month-on-month average bond size from R627302 this February.
The year-on-year average deposit continues to record significant increases as a result of the banks' lending policies. The average deposit as percentage of purchase price required is up 45,5percent - from an average of 15,8percent required in March 2008 to 23percent required last month.
The average bank decline ratio has again shown a substantial annual increase. This has brought average decline ratios up to 58percent this March from 43percent a year ago.
Ooba's analysis shows that the overall bank approval rate has slipped from just over 80percent in May 2007 to under 55percent this March.
For the same period, deposits have increased from 10percent to over 20percent. Taking into account that sales are down nearly 50percent, Ooba says the value of new loans being granted are down more than 85percent since May 2007.