There has been a significant relaxation in the deposit requirements by banks for home loans, according to mortgage originator ooba.

It attributed the relaxation in deposit requirements for the 3.7 percent increase in the average approved bond to R715 319 last month from R689 742 in April last year.

The average size of home loan deposits as a percentage of the purchase price decreased year on year by 39.6 percent to 13.1 percent or R108 164 last month from 21.7 percent or R191 302 a year ago.

The average deposit as a percentage of the purchase price was 15.6 percent or R134 519 in March this year.

Saul Geffen said the average home loan deposit was only 13 percent of the purchase prices - a significant improvement from levels seen in 2009.

"This opens up a considerably broader homebuyer base who can now afford the lower deposit requirements," he said.

Other good news was that the bank initial decline ratio at 45.4 percent was 8.7 percent lower year on year, while the effective approval ration had improved to 64.4 percent last month from 57.3 percent a year ago.

Geffen said the strong approval rates last month built on the recent record numbers recorded in March.

The value of approved home loans handled by ooba in March was the highest since October 2008. The ability to obtain finance was one of the biggest drivers in the property market and the consistent improvements were therefore positive for the market.

Despite the relaxation in the criteria for home loan approvals by banks, the latest ooba statistics revealed that the average purchase price of a house declined by 6.5 percent to R823 483 last month from R881 044 a year ago.

The average purchase price by a first-time buyer dropped by 0.2 percent to R625 252 from R626 719.

Geffen said the decline last month pointed to a further period of declining house prices on the back of the strong growth experienced in the first half of last year.

"We anticipate the negative growth trend will reverse shortly after mid-year and show moderate positive growth for the second half of the year," he said.

The Mercury