Thabang Mokopanele
17 June 2009
Johannesburg — "The oobarometer continues to reflect declines in year-on-year house prices, but at a slower rate," ooba CE Saul Geffen said.
The average purchase price of a house came in at R773440 last month, compared with R777277 in May last year. However, month-on- month house prices increased 0,7%, from R767769 in April.
A 9,9% reduction in the year-on- year average bond size was recorded from R665192 in May last year to R598733 last month. There was also a 1,4% reduction in the month-on- month average.
The year-on-year average deposit as a percentage of purchase price continues to show a significant increase, up to 22,6% last month compared with 14,4% last year. The month-on- month average is also up 8,1%, from a 20,9% average deposit as a percentage of the purchase price in April.
"There has been a significant increase in deposits now required to purchase a home. The lack of funds for deposits, despite good credit scores, is a big contributor to the sluggishness in the property market."
The average bank decline ratio and the ratio of applications declined by one lender and approved by another continue to show annual deterioration. The average decline ratio is 49,5% compared with 46,8% in May last year. Only 22,6% of applications declined by one lender last month had been approved by another, compared with 39,5% last May .
However, month-on-month data show a slight improvement in both areas with a 0,5% decrease in the average decline ratio from 50,01% in April, and a 6,9% absolute increase in the ratio of applications declined by one lender but approved by another, from 15,7% in April.
Geffen said while the property market was still in a downward cycle, sentiment indicated it would stabilise by the end of the year and begin recovery by the middle of next year.
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