New Home Buyers Find Property Purchase Easier

February 8 - Standard Bank has said that due to looser credit criteria and a continued focus by banks on the affordable housing segment of the market, home buyers are finding it easier to purchase property these days.

Bank managers have taken it on themselves to grant credit more easily to lower ends of the market, in the hope of kick starting this part of the market once more.

Standard Bank said this week that it expects house price growth to come out from the red and grow between 3 - 5%.

"With real income growth envisaged at 2% this year, expectations for stronger growth in the market will be misplaced," said a senior economist at the bank, John Botha, who penned a monthly report.

The median house price suggests that growth will become positive as early as the second quarter of 2009, however in real terms, house prices have declined about 9.3% year on year.

According to the bank, there has been a significant rise in the number of home loans granted to South Africans looking to enter the property market,

Since September, banks have been loosening credit criteria, making it easier for potential homebuyers to make their purchases.

But while Standard Bank is predicting a rise in house price growth of between 3 - 5%, Absa is even more optimistic, placing figures closer to 7%.

Absa also said that by 2012, the rate of growth could reach double digits.

At present, those entering the property market have at their disposal mortgages at the current 10.5 % on average, or a fixed rate loan.

2/8/2010 11:33:06 AM