The average purchase price was R810,156 in March 2008 compared to R775,559 in March this year. 

The oobarometer reflects a significant reduction in the year-on-year and month-on-month average approved bond size which reflects the banks’ higher deposit requirements.

The average bond size recorded in March 2009 was R596,903, a 12.4% drop from the average bond size of R681,761 in March 2008 and a 4.8% drop in the month-on-month average bond size from R627,302 in February this year.

The year-on-year average deposit continues to record significant increases as a result of banks lending policies. The average deposit as percentage of purchase price required is up 45.5%; from an average of 15.8% required in March 2008 to 23% required last month. 

The average bank decline ratio has again shown a substantial annual increase, bringing average decline ratios up to 58% in March 2009 from 43% a year earlier.

The ratio of applications declined by one lender but approved also continues to show significant annual decreases with now only 21% of applicants declined by one lender being approved by others.

ooba’s analysis  shows that the overall bank approval rate (after taking into account the ratio of applications declined by one lender but approved by another) has slipped from just over 80% in May 2007, to under 55% by March 2009. For the same period, deposits have increased from 10% to over 20%. Taking into account that property sales are down nearly 50%, the value of new home loans being granted are down over 85% since May 2007.

“Despite improvements in affordability due to the rate cuts, the banks reticence to lend continues to impact the property market,” states Geffen. “With close to a 60% rejection rate, demand is not being supported and downward pressure on property prices remains.”