According to Rhys Dyer, Chief Operating Officer at ooba, South Africa's leading bond originator, consumers can expect nominal growth in property prices of between 4% and 5% for the year. "This is very much in line with inflation forecasts, resulting in very little real growth in property prices for the year.

"Whilst we do not expect any significant further interest rate easing, interest rates are likely to remain at their current low levels - the lowest for over three decades - inflation forecasts remain benign and real increases in wage growth are expected in 2011, which may potentially drive some improvements in disposable income levels.

Dyer says the low growth environment is being driven by low demand factors as a result of the high household debt to disposable income levels, the current economic climate and the fragile state of the labour market. "Debt to disposable income levels, although off their highs from last year, are still sitting at 78%, compared to levels of 60% in 2005. With little further impetus likely to occur in 2011 from reduced interest rates, the debt to disposable income ratio is likely to remain sticky at current levels, continuing to subdue demand.

He says, however, the next year should see a continued improvement in the key drivers of lower decline rates by lenders and a gradual improvement in consumer affordability from the ongoing low interest rate environment.

According to the latest oobarometer for November 2010, the average initial decline ratio for home loan applications fell 4.0% year-on-year to 45.9% in November, while the ratio of applications declined by one lender but approved by another showed a significant improvement, up 9.7% year-on-year to 32.9%. The effective approval ratio for home loan applications rose 7.5% to 69.2% in November 2010 from a year earlier.

"With low property price growth, low inflation, low interest rates and some real wage growth, one would expect to see a gradual improvement in consumer affordability statistics, which should help to drive a gradual improvement in bank decline rates."

He says, however, that it is unlikely that there will be any significant softening in banks credit scorecard criteria over the next 12 months.

According to Rhys Dyer, Chief Operating Officer at ooba, South Africa's leading bond originator, consumers can expect nominal growth in property prices of between 4% and 5% for the year. "This is very much in line with inflation forecasts, resulting in very little real growth in property prices for the year.

"Whilst we do not expect any significant further interest rate easing, interest rates are likely to remain at their current low levels - the lowest for over three decades - inflation forecasts remain benign and real increases in wage growth are expected in 2011, which may potentially drive some improvements in disposable income levels.

Dyer says the low growth environment is being driven by low demand factors as a result of the high household debt to disposable income levels, the current economic climate and the fragile state of the labour market. "Debt to disposable income levels, although off their highs from last year, are still sitting at 78%, compared to levels of 60% in 2005. With little further impetus likely to occur in 2011 from reduced interest rates, the debt to disposable income ratio is likely to remain sticky at current levels, continuing to subdue demand.

He says, however, the next year should see a continued improvement in the key drivers of lower decline rates by lenders and a gradual improvement in consumer affordability from the ongoing low interest rate environment.

According to the latest oobarometer for November 2010, the average initial decline ratio for home loan applications fell 4.0% year-on-year to 45.9% in November, while the ratio of applications declined by one lender but approved by another showed a significant improvement, up 9.7% year-on-year to 32.9%. The effective approval ratio for home loan applications rose 7.5% to 69.2% in November 2010 from a year earlier.

"With low property price growth, low inflation, low interest rates and some real wage growth, one would expect to see a gradual improvement in consumer affordability statistics, which should help to drive a gradual improvement in bank decline rates."

He says, however, that it is unlikely that there will be any significant softening in banks credit scorecard criteria over the next 12 months.

According to Rhys Dyer, Chief Operating Officer at ooba, South Africa's leading bond originator, consumers can expect nominal growth in property prices of between 4% and 5% for the year. "This is very much in line with inflation forecasts, resulting in very little real growth in property prices for the year.

"Whilst we do not expect any significant further interest rate easing, interest rates are likely to remain at their current low levels - the lowest for over three decades - inflation forecasts remain benign and real increases in wage growth are expected in 2011, which may potentially drive some improvements in disposable income levels.

Dyer says the low growth environment is being driven by low demand factors as a result of the high household debt to disposable income levels, the current economic climate and the fragile state of the labour market. "Debt to disposable income levels, although off their highs from last year, are still sitting at 78%, compared to levels of 60% in 2005. With little further impetus likely to occur in 2011 from reduced interest rates, the debt to disposable income ratio is likely to remain sticky at current levels, continuing to subdue demand.

He says, however, the next year should see a continued improvement in the key drivers of lower decline rates by lenders and a gradual improvement in consumer affordability from the ongoing low interest rate environment.

According to the latest oobarometer for November 2010, the average initial decline ratio for home loan applications fell 4.0% year-on-year to 45.9% in November, while the ratio of applications declined by one lender but approved by another showed a significant improvement, up 9.7% year-on-year to 32.9%. The effective approval ratio for home loan applications rose 7.5% to 69.2% in November 2010 from a year earlier.

"With low property price growth, low inflation, low interest rates and some real wage growth, one would expect to see a gradual improvement in consumer affordability statistics, which should help to drive a gradual improvement in bank decline rates."

He says, however, that it is unlikely that there will be any significant softening in banks credit scorecard criteria over the next 12 months.

According to a recent poll by ooba, South Africa's leading bond origination company, 49% of respondents said existing green features such as insulation, solar panels and water-conserving facilities are very important factors when choosing a home. 18% of respondents also said they were important, 20% of respondents said they were of some interest and only 13% said they were not important at all.

Jenny Rushin at ooba says the results indicate that consumers are becoming increasingly aware of the importance of being environmentally conscious. "It is very important that we all begin taking steps to protect and conserve the environment and making eco-friendly improvements to your home is an ideal and easy way to start."

Steps by the government such as the Department of Energy's commitment to installing one-million solar water heaters by 2014, with the aim of increasing this to 5.6-million by 2020, have also put green initiatives at the forefront of consumers' minds.

However, Rushin says making a home eco friendly does not have to be an expensive exercise as there are there are other cost effective measures homeowners can take.

Rushin has the following tips to help green your property:

Energy Efficient Appliances - Water heating consumes almost 50% of the electricity in a household, so it is wise to make your geyser as efficient as possible. Install a thermometer to regulate the heating so that hot water will only be used when it is needed and turn off the geyser when you go on vacation.

Conserve Water - A single flush of the toilet can use 11 litres of water. Installing a pump system can result in significant savings as it enables one to utilise water from the bath, shower and washing machine.

Eco-Friendly Products - When purchasing household cleaners, be sure to read the labels to check if the ingredients aren¿t potentially toxic to you and your environment. Many supermarkets now stock eco-friendly product ranges.

Energy Efficient Lighting - Energy efficient light bulbs use 66% less energy and last up to ten times longer which can mean dramatic savings in energy costs as well as helping to make a home more energy efficient.

Green your garden - Instead of gardening with synthetic fertilizers, use compost which provides soil organisms and the balance of nutrients needed. A healthy soil will minimize weeds and produce healthy plants which will prevent pest problems from developing.

According to a recent poll by ooba, South Africa's leading bond origination company, 49% of respondents said existing green features such as insulation, solar panels and water-conserving facilities are very important factors when choosing a home. 18% of respondents also said they were important, 20% of respondents said they were of some interest and only 13% said they were not important at all.

Jenny Rushin at ooba says the results indicate that consumers are becoming increasingly aware of the importance of being environmentally conscious. "It is very important that we all begin taking steps to protect and conserve the environment and making eco-friendly improvements to your home is an ideal and easy way to start."

Steps by the government such as the Department of Energy's commitment to installing one-million solar water heaters by 2014, with the aim of increasing this to 5.6-million by 2020, have also put green initiatives at the forefront of consumers' minds.

However, Rushin says making a home eco friendly does not have to be an expensive exercise as there are there are other cost effective measures homeowners can take.

Rushin has the following tips to help green your property:

Energy Efficient Appliances - Water heating consumes almost 50% of the electricity in a household, so it is wise to make your geyser as efficient as possible. Install a thermometer to regulate the heating so that hot water will only be used when it is needed and turn off the geyser when you go on vacation.

Conserve Water - A single flush of the toilet can use 11 litres of water. Installing a pump system can result in significant savings as it enables one to utilise water from the bath, shower and washing machine.

Eco-Friendly Products - When purchasing household cleaners, be sure to read the labels to check if the ingredients aren¿t potentially toxic to you and your environment. Many supermarkets now stock eco-friendly product ranges.

Energy Efficient Lighting - Energy efficient light bulbs use 66% less energy and last up to ten times longer which can mean dramatic savings in energy costs as well as helping to make a home more energy efficient.

Green your garden - Instead of gardening with synthetic fertilizers, use compost which provides soil organisms and the balance of nutrients needed. A healthy soil will minimize weeds and produce healthy plants which will prevent pest problems from developing.

The statistics show that 57.9% of self-employed applicants had their bond declined in the 2009/10 financial year, an increase of 2.4% compared to 2008/09. This compares with a 3.5% fall in the decline ratio for employed applicants in 2009/10 to 48.1%, from a 51.5% decline ratio the previous year.

According to Saul Geffen, CEO of ooba, self-employed applicants tend to be viewed as a higher risk than employed applicants, due to the perceived instability in income of these individuals, particularly in these challenging economic times.

He says it is important, however, for self-employed applicants not to be disheartened if their bond application is turned down. "There is no doubt it is harder for self-employed applicants to obtain financing for their bond but there are a number of ways to improve the likelihood of gaining approval, one of which is applying through a bond originator."

The wide variances in the credit requirements and decline ratios across the banks illustrate the growing importance of applying to multiple lenders. In the last financial year there was a 32% difference between the banks with the highest and lowest average decline rates.

Geffen says that by using a bond originator, applicants can make simultaneous submissions to lenders, which saves time and avoids duplication of documentation. "Credit and risk profiling of applicants are specific to each bank. It is thus important that applicants are not disheartened by the first decline decision they receive from a lender, and that they persevere with other banks."

The latest statistics from the oobarometer showed that the ratio of applications declined by one lender but approved by another increased significantly, up 11.2% year-on-year to 30.4% in August 2010.

Homebuyers use bond originators to shop around for the best home loan deals and to secure quick approvals. A bond originator's service is at no cost to homebuyers and without any obligation to accept a particular loan sourced.

The statistics show that 57.9% of self-employed applicants had their bond declined in the 2009/10 financial year, an increase of 2.4% compared to 2008/09. This compares with a 3.5% fall in the decline ratio for employed applicants in 2009/10 to 48.1%, from a 51.5% decline ratio the previous year.

According to Saul Geffen, CEO of ooba, self-employed applicants tend to be viewed as a higher risk than employed applicants, due to the perceived instability in income of these individuals, particularly in these challenging economic times.

He says it is important, however, for self-employed applicants not to be disheartened if their bond application is turned down. "There is no doubt it is harder for self-employed applicants to obtain financing for their bond but there are a number of ways to improve the likelihood of gaining approval, one of which is applying through a bond originator."

The wide variances in the credit requirements and decline ratios across the banks illustrate the growing importance of applying to multiple lenders. In the last financial year there was a 32% difference between the banks with the highest and lowest average decline rates.

Geffen says that by using a bond originator, applicants can make simultaneous submissions to lenders, which saves time and avoids duplication of documentation. "Credit and risk profiling of applicants are specific to each bank. It is thus important that applicants are not disheartened by the first decline decision they receive from a lender, and that they persevere with other banks."

The latest statistics from the oobarometer showed that the ratio of applications declined by one lender but approved by another increased significantly, up 11.2% year-on-year to 30.4% in August 2010.

Homebuyers use bond originators to shop around for the best home loan deals and to secure quick approvals. A bond originator's service is at no cost to homebuyers and without any obligation to accept a particular loan sourced.

Craig Deats, Executive Director Sales and Distribution at ooba, provides answers to some of the most commonly asked questions by these first-time buyers:

How much can I afford?

As a first-time home buyer it is important to know exactly how much money you can borrow for your new home and, most importantly, what monthly repayments you can afford. One should use affordability as the main factor in deciding the loan amount to apply for. Your bond originator will help you in calculating and determining what you can afford.

Determining the right price range is an essential first step to avoid wasting time looking at unsuitable properties. Make sure that you are aware of all the costs involved in buying a home. In addition to paying a deposit there are a number of other upfront costs involved such as legal costs, transfer duty, bond registration fees and bank fees. These costs all need to be budgeted for.

What criteria do the banks use to award home loans?

The main reasons for bond applications being declined are affordability and credit profile. Prior to the NCA affordability was a simple calculation based on 30% of income. Affordability is now based on net disposable income and for most people this means access to less credit than would have been the case in the past. A clean credit history and being up to date on all debt instalment payments is important. Additional factors that banks look at would include:

Craig Deats, Executive Director Sales and Distribution at ooba, provides answers to some of the most commonly asked questions by these first-time buyers:

How much can I afford?

As a first-time home buyer it is important to know exactly how much money you can borrow for your new home and, most importantly, what monthly repayments you can afford. One should use affordability as the main factor in deciding the loan amount to apply for. Your bond originator will help you in calculating and determining what you can afford.

Determining the right price range is an essential first step to avoid wasting time looking at unsuitable properties. Make sure that you are aware of all the costs involved in buying a home. In addition to paying a deposit there are a number of other upfront costs involved such as legal costs, transfer duty, bond registration fees and bank fees. These costs all need to be budgeted for.

What criteria do the banks use to award home loans?

The main reasons for bond applications being declined are affordability and credit profile. Prior to the NCA affordability was a simple calculation based on 30% of income. Affordability is now based on net disposable income and for most people this means access to less credit than would have been the case in the past. A clean credit history and being up to date on all debt instalment payments is important. Additional factors that banks look at would include:

The concept of taking out credit has been given a hard time in recent years - following the sub prime mortgage crisis in the US and rising levels of indebtedness in South Africa.

However, according to Kay Geldenhuys, Property Finance Processing Manager at ooba, South Africa¿s leading bond originator, if it is used in a constructive way, credit can prove to be a vital tool in building wealth creation for the future.

Here, Geldenhuys discusses the various ways consumers can use credit to their own advantage.

Property

Property is a prime example of using good credit for wealth creation as property owners use the bank¿s money to finance their purchase, paying off a small portion each month while the property appreciates in capital value.

"The obvious type of good credit is purchasing a property either as a main residence or as an investment property and financing the purchase through a homeloan", says Geldenhuys. "With the property market now showing clear signs of recovery and prices continuing to rise, it is still one of the best investments."

She advises anyone who is purchasing property for investment purposes to make sure that the property is in an area where there will be sustainable capital growth and where there is a demand for rental properties.

"Potential homebuyers should also negotiate the best rate concession from their bank, and if neccesary shop around with other lenders, in order to secure the cheapest credit and maximize on their investment."

"However, you must understand that property is a long-term investment not a 'get-rich-quick' scheme and you must be willing to hold onto your property through the dips and troughs such as we have experienced in the last few years," warns Geldenhuys.

Credit cards

"Most consumers are surprised to learn that credit cards can also be a source of good credit if they are used wisely," says Geldenhuys. "Your credit card allows you to earn interest in your current account whilst you use the bank¿s money to finance your purchases during the month."

However, she cautions that this will only work if you are disciplined and repay the full outstanding balance at the end of the month to avoid paying interest on your credit card.

Capital acquisition

Another type of 'good' credit would be any other capital acquisition that requires finance from a bank and that you can derive an income from, says Geldenhuys.

A capital acquisition could be an investment in machinery or equipment or, of course, investment in property that is income generating. "Credit for these sorts of assets makes you wealthier, it is only credit borrowed from the bank for luxury purchases like a car or clothing that make you poorer."

Debt Consolidation

Debt consolidation is another example of good credit. Consumers can use the access facility on a home loan to settle their various retail and installment sale accounts. "Your homeloan rate will be much cheaper than the finance rates of your retail or installment sale accounts."

However, Geldenhuys warns that if consumers use their home loan to settle outstanding debts and store cards, they must be vigilant to not use these cards again, particularly if they are still paying off the previous debt.

Finally, Geldenhuys also suggests paying a higher installment on your credit facility than the minimum required by the bank to ensure that you attain your wealth creation goal as quickly as possible.

For example; a R20,000 lump sum deposited into a million rand bond will save you R118,576 in interest over the loan period, assuming that your interest rate is 10%. This means you will save more than 5 times the original amount as well as cutting your repayments to 18.8 years on a 20 year bond.

The concept of taking out credit has been given a hard time in recent years - following the sub prime mortgage crisis in the US and rising levels of indebtedness in South Africa.

However, according to Kay Geldenhuys, Property Finance Processing Manager at ooba, South Africa¿s leading bond originator, if it is used in a constructive way, credit can prove to be a vital tool in building wealth creation for the future.

Here, Geldenhuys discusses the various ways consumers can use credit to their own advantage.

Property

Property is a prime example of using good credit for wealth creation as property owners use the bank¿s money to finance their purchase, paying off a small portion each month while the property appreciates in capital value.

"The obvious type of good credit is purchasing a property either as a main residence or as an investment property and financing the purchase through a homeloan", says Geldenhuys. "With the property market now showing clear signs of recovery and prices continuing to rise, it is still one of the best investments."

She advises anyone who is purchasing property for investment purposes to make sure that the property is in an area where there will be sustainable capital growth and where there is a demand for rental properties.

"Potential homebuyers should also negotiate the best rate concession from their bank, and if neccesary shop around with other lenders, in order to secure the cheapest credit and maximize on their investment."

"However, you must understand that property is a long-term investment not a 'get-rich-quick' scheme and you must be willing to hold onto your property through the dips and troughs such as we have experienced in the last few years," warns Geldenhuys.

Credit cards

"Most consumers are surprised to learn that credit cards can also be a source of good credit if they are used wisely," says Geldenhuys. "Your credit card allows you to earn interest in your current account whilst you use the bank¿s money to finance your purchases during the month."

However, she cautions that this will only work if you are disciplined and repay the full outstanding balance at the end of the month to avoid paying interest on your credit card.

Capital acquisition

Another type of 'good' credit would be any other capital acquisition that requires finance from a bank and that you can derive an income from, says Geldenhuys.

A capital acquisition could be an investment in machinery or equipment or, of course, investment in property that is income generating. "Credit for these sorts of assets makes you wealthier, it is only credit borrowed from the bank for luxury purchases like a car or clothing that make you poorer."

Debt Consolidation

Debt consolidation is another example of good credit. Consumers can use the access facility on a home loan to settle their various retail and installment sale accounts. "Your homeloan rate will be much cheaper than the finance rates of your retail or installment sale accounts."

However, Geldenhuys warns that if consumers use their home loan to settle outstanding debts and store cards, they must be vigilant to not use these cards again, particularly if they are still paying off the previous debt.

Finally, Geldenhuys also suggests paying a higher installment on your credit facility than the minimum required by the bank to ensure that you attain your wealth creation goal as quickly as possible.

For example; a R20,000 lump sum deposited into a million rand bond will save you R118,576 in interest over the loan period, assuming that your interest rate is 10%. This means you will save more than 5 times the original amount as well as cutting your repayments to 18.8 years on a 20 year bond.

The latest oobarometer stats reveal that the average purchase price growth among first-time buyers remains strong at 12.1% in June. This, together with the continued easing in lending criteria, is good news for potential homebuyers in South Africa.

Due to economic restraints however, many first-time homebuyers are restricted to a small home or apartment property, but according to Linda Rall, KZN Provincial Sales Manager at ooba, this should not deter them from investing, as creating a sense of space is not difficult and does not require the services of an expensive interior designer. "By making a few minor, but effective changes to the interior of a property can easily maximise and create the illusion of space in smaller properties."

When creating space, the reflective value of light is essential says Rall, "Dark colours absorb light and shrink already small areas. Bright and pale coloured walls will not only create an impression of lifting up the whole room, but also give the feeling of height."

Rall adds that a rule of thumb is to not create too much clutter, but rather opt for continuity and flow. "In smaller areas one should keep the scheme simple and for a soothing effect, this can be achieved from choosing and matching pieces with similar appeal.

"Natural light is vital and should be used to its fullest potential, as it penetrates an interior space of up to 7 meters". Rall advises maximizing the effect of light by investing in mirrors and mirrored surfaces such as counters and coffee tables, as they create depth by replicating light and also creating the illusion of scale.

In the evening Rall says to generate volume an option is to spread a few lamps throughout a room, or use a mix of lights such as downlighters, standing or desk lamps which brighten up a room and bounce different waves of light off different surfaces.

"Your best possible choice of furniture is also a good way to create space. Any dark and bulky furniture should be gotten rid of. Often when you remove only one item it creates more space, so only keep what is necessary."

Instead invest in simple, sleek furniture, but also choose an object that serves more than one function, such as a sleeper couch or storage boxes that form part of a coffee table. "Try using furniture pieces with legs that are not too high and not `boxy¿ in shape. Not only will this create space, but it will also improve the functionality of a room and make it appear less crowded".

Placing furniture along the walls will automatically create more space in the centre of the room. Keep the walkways and floor clear. "If you can see from one room to another it immediately opens up the entire space."

Rall suggests using large plain textured carpets that are not heavily patterned as they define the space and create an impression of generousness and continuity.

"Window dressings should be kept simple. Blinds and curtains should be hung from midway, between ceiling and the top of the window. This is not to appear too voluminous for the space they are in."

The latest oobarometer stats reveal that the average purchase price growth among first-time buyers remains strong at 12.1% in June. This, together with the continued easing in lending criteria, is good news for potential homebuyers in South Africa.

Due to economic restraints however, many first-time homebuyers are restricted to a small home or apartment property, but according to Linda Rall, KZN Provincial Sales Manager at ooba, this should not deter them from investing, as creating a sense of space is not difficult and does not require the services of an expensive interior designer. "By making a few minor, but effective changes to the interior of a property can easily maximise and create the illusion of space in smaller properties."

When creating space, the reflective value of light is essential says Rall, "Dark colours absorb light and shrink already small areas. Bright and pale coloured walls will not only create an impression of lifting up the whole room, but also give the feeling of height."

Rall adds that a rule of thumb is to not create too much clutter, but rather opt for continuity and flow. "In smaller areas one should keep the scheme simple and for a soothing effect, this can be achieved from choosing and matching pieces with similar appeal.

"Natural light is vital and should be used to its fullest potential, as it penetrates an interior space of up to 7 meters". Rall advises maximizing the effect of light by investing in mirrors and mirrored surfaces such as counters and coffee tables, as they create depth by replicating light and also creating the illusion of scale.

In the evening Rall says to generate volume an option is to spread a few lamps throughout a room, or use a mix of lights such as downlighters, standing or desk lamps which brighten up a room and bounce different waves of light off different surfaces.

"Your best possible choice of furniture is also a good way to create space. Any dark and bulky furniture should be gotten rid of. Often when you remove only one item it creates more space, so only keep what is necessary."

Instead invest in simple, sleek furniture, but also choose an object that serves more than one function, such as a sleeper couch or storage boxes that form part of a coffee table. "Try using furniture pieces with legs that are not too high and not `boxy¿ in shape. Not only will this create space, but it will also improve the functionality of a room and make it appear less crowded".

Placing furniture along the walls will automatically create more space in the centre of the room. Keep the walkways and floor clear. "If you can see from one room to another it immediately opens up the entire space."

Rall suggests using large plain textured carpets that are not heavily patterned as they define the space and create an impression of generousness and continuity.

"Window dressings should be kept simple. Blinds and curtains should be hung from midway, between ceiling and the top of the window. This is not to appear too voluminous for the space they are in."

The oobarometer price index revealed that the average house price rose 6.8% year-on-year in June to R837 599 from R784 427 a year earlier. "House prices are continuing to increase, albeit at a slower pace than in the past few months," says Saul Geffen at ooba. "We have seen a sharp recovery in house prices for the first half of this year with three months of double digit year-on-year house price growth between February and May."

Meanwhile, the growth in the average purchase price amongst first time buyers remains strong, with year-on-year growth of 12.1% in June.

According to other indicators tracked by ooba, the average approved bond size increased 14.3% year on year in June to R695 381, compared with R608 316 a year earlier. The average deposit as a percentage of purchase price fell 24.4% year-on-year to R142 218, equivalent to an average deposit of 17.0% of the purchase price.

"We are seeing a continued easing in lending criteria, which is good news for potential homebuyers and the property market in general."

The average decline ratio increased marginally in June, up 1.3% year-on-year to 48.8% from 47.5% a year earlier, due to the higher proportion of 100% loans in June. However, on a month-on-month basis the decline ratio fell 4.1% to 48.8% from 52.9% in May.

The ratio of applications declined by one lender but approved by another increased 7.5% year on year to 24.8%. "This is good news for homebuyers, as it indicates a higher probability of loan approval from another bank even if initially declined. It also demonstrates the importance of shopping around in securing home loan approval.

"General sentiment has no doubt been enhanced by the successful hosting of the World Cup. Overall, the signs remain positive for the housing market, although we expect price growth to continue at a slightly slower pace in the second half of the year."

Full oobarometer analysis:

Indicator	June 2010	June 2009	Change yr on yr (June 10 vs June 09)	May 2010	Change month on month (June 10 to May 10)
Avg purchase price	R 837,599	R 784,427	6.8%	R 872,038	-4.0%
Avg purchase price of  first time buyer	R 611,611	R 545,515	12.1%	R 604,857	1.1%
Avg approved bond size	< p align="center">R695,381	< p align="center">R 608,316	14.3%	R 716,862	-3.0%
Avg deposit (as % of purchase price)	17.0% (R 142,218)	22.5% (R 176,111)	-24.4%	17.8% (R155,221)	-4.5%
Avg age of applicant	37	36	1 year older	37	No change
Avg decline ratio	48.8%	47.5%	1.3%	52.9%	-4.1%
Ratio of applications declined by one lender but approved by another	24.8%	17.3%	7.5% decrease	16.2%	8.6

The oobarometer price index revealed that the average house price rose 6.8% year-on-year in June to R837 599 from R784 427 a year earlier. "House prices are continuing to increase, albeit at a slower pace than in the past few months," says Saul Geffen at ooba. "We have seen a sharp recovery in house prices for the first half of this year with three months of double digit year-on-year house price growth between February and May."

Meanwhile, the growth in the average purchase price amongst first time buyers remains strong, with year-on-year growth of 12.1% in June.

According to other indicators tracked by ooba, the average approved bond size increased 14.3% year on year in June to R695 381, compared with R608 316 a year earlier. The average deposit as a percentage of purchase price fell 24.4% year-on-year to R142 218, equivalent to an average deposit of 17.0% of the purchase price.

"We are seeing a continued easing in lending criteria, which is good news for potential homebuyers and the property market in general."

The average decline ratio increased marginally in June, up 1.3% year-on-year to 48.8% from 47.5% a year earlier, due to the higher proportion of 100% loans in June. However, on a month-on-month basis the decline ratio fell 4.1% to 48.8% from 52.9% in May.

The ratio of applications declined by one lender but approved by another increased 7.5% year on year to 24.8%. "This is good news for homebuyers, as it indicates a higher probability of loan approval from another bank even if initially declined. It also demonstrates the importance of shopping around in securing home loan approval.

"General sentiment has no doubt been enhanced by the successful hosting of the World Cup. Overall, the signs remain positive for the housing market, although we expect price growth to continue at a slightly slower pace in the second half of the year."

Full oobarometer analysis:

Indicator	June 2010	June 2009	Change yr on yr (June 10 vs June 09)	May 2010	Change month on month (June 10 to May 10)
Avg purchase price	R 837,599	R 784,427	6.8%	R 872,038	-4.0%
Avg purchase price of  first time buyer	R 611,611	R 545,515	12.1%	R 604,857	1.1%
Avg approved bond size	< p align="center">R695,381	< p align="center">R 608,316	14.3%	R 716,862	-3.0%
Avg deposit (as % of purchase price)	17.0% (R 142,218)	22.5% (R 176,111)	-24.4%	17.8% (R155,221)	-4.5%
Avg age of applicant	37	36	1 year older	37	No change
Avg decline ratio	48.8%	47.5%	1.3%	52.9%	-4.1%
Ratio of applications declined by one lender but approved by another	24.8%	17.3%	7.5% decrease	16.2%	8.6

According to the poll, 27% of respondents believe that a 100% bond is reasonable, while 42% said a deposit of 10% was reasonable. 12% of respondents said they believe a deposit of more than 30% was reasonable.

However, according to Craig Deats at ooba, while all banks have again started offering 100% home loans, being able to put down a deposit does make it more likely that your bond application will be approved.

"In the last few months, we have seen a significant increase in applications with low or no deposit. Although it is possible to have your home loan application approved on this basis, it is less likely as the introduction of the National Credit Act (NCA) has resulted in more stringent lending criteria than was applied in the past."

Deats says that currently, the two major reasons for bond declines are having insufficient net disposable income to afford the bond repayments and a poor credit profile.

He adds that besides improving your chances of getting your home loan approved, a bigger deposit could result in a more favourable bond rate which will save you in interest over the term of the loan. "As a home loan is paid back over a long period, generally between 20 and 25 years, even a small deduction in the interest rate on your bond, can save you thousands in interest payments over time."

Finally, he says that some sellers are also more willing to accept an offer if the buyer has a deposit, as there is a higher likelihood that they will complete on a sale.

According to the poll, 27% of respondents believe that a 100% bond is reasonable, while 42% said a deposit of 10% was reasonable. 12% of respondents said they believe a deposit of more than 30% was reasonable.

However, according to Craig Deats at ooba, while all banks have again started offering 100% home loans, being able to put down a deposit does make it more likely that your bond application will be approved.

"In the last few months, we have seen a significant increase in applications with low or no deposit. Although it is possible to have your home loan application approved on this basis, it is less likely as the introduction of the National Credit Act (NCA) has resulted in more stringent lending criteria than was applied in the past."

Deats says that currently, the two major reasons for bond declines are having insufficient net disposable income to afford the bond repayments and a poor credit profile.

He adds that besides improving your chances of getting your home loan approved, a bigger deposit could result in a more favourable bond rate which will save you in interest over the term of the loan. "As a home loan is paid back over a long period, generally between 20 and 25 years, even a small deduction in the interest rate on your bond, can save you thousands in interest payments over time."

Finally, he says that some sellers are also more willing to accept an offer if the buyer has a deposit, as there is a higher likelihood that they will complete on a sale.

The most notable of these trends is that the percentage of White applicants has been consistently less than the combined total of Black and Coloured applicants over the last three years.

According to ooba, the proportion of Black applicants has risen steadily over the last few years, averaging 42% during 2009. However, this percentage has dipped in the first four months of 2010 to 38%.

In contrast, the proportion of White applicants has risen from an average of 43% in 2009 to 47% during the first four months of 2010. The proportion of Asian and Coloured applicants has remained constant since the beginning of 2008, averaging 8% and 7% respectively.

According to ooba CEO, Saul Geffen, the downward trend in the percentage of Black applicants in 2010 can likely be attributed to the fact that the tough economic conditions and stricter lending criteria have had a bigger impact on potential buyers at the lower end of the property price spectrum.

The ooba data shows that potential Black buyers make up 60-70% of total applicants for properties valued at less than R500 000. This proportion drops significantly to around 30% for properties valued at between R500 000 and R1 million, and 10-20% for properties valued at over R1 million.

"The stricter bank lending criteria imposed under the NCA has also made it particularly tough for first time home buyers who aren¿t able to meet the affordability criteria."

However, Geffen says that as the economy recovers, the percentage of Black buyers will likely re-commence its upward trend. "We expect to see an increasing percentage of Black buyers in line with the shifting economic base in South Africa."

The most notable of these trends is that the percentage of White applicants has been consistently less than the combined total of Black and Coloured applicants over the last three years.

According to ooba, the proportion of Black applicants has risen steadily over the last few years, averaging 42% during 2009. However, this percentage has dipped in the first four months of 2010 to 38%.

In contrast, the proportion of White applicants has risen from an average of 43% in 2009 to 47% during the first four months of 2010. The proportion of Asian and Coloured applicants has remained constant since the beginning of 2008, averaging 8% and 7% respectively.

According to ooba CEO, Saul Geffen, the downward trend in the percentage of Black applicants in 2010 can likely be attributed to the fact that the tough economic conditions and stricter lending criteria have had a bigger impact on potential buyers at the lower end of the property price spectrum.

The ooba data shows that potential Black buyers make up 60-70% of total applicants for properties valued at less than R500 000. This proportion drops significantly to around 30% for properties valued at between R500 000 and R1 million, and 10-20% for properties valued at over R1 million.

"The stricter bank lending criteria imposed under the NCA has also made it particularly tough for first time home buyers who aren¿t able to meet the affordability criteria."

However, Geffen says that as the economy recovers, the percentage of Black buyers will likely re-commence its upward trend. "We expect to see an increasing percentage of Black buyers in line with the shifting economic base in South Africa."

Nearly 80% of respondents to a new PropertyGenie poll hosted on behalf of ooba ¿ South Africa's leading bond originator ¿ cited location and price as the most important factors to them when buying a home.

44% of respondents put location of the property at the top of their list of deciding factors, while 34% chose price. Views were most important to 10% of respondents, while proximity to work / school received 7% of the votes. Parking received 3%, while 2% said the fact that a property was newly refurbished was the key factor in their purchasing decision.

According to Craig Deats at ooba, the old adage of location, location, location still rings true for many South African homebuyers.

"While it is no secret that location plays a crucial role in determining the value of a property, many people still choose to ignore this fact, which can be extremely costly when buying primarily for investment purposes."

He adds that it is also important to get some idea of what the area you are looking to buy in will look like 10 years down the line. "The demographics of an area can change relatively quickly. What could be classed as a vibey student area today could be on its way to becoming either a chic and trendy neighourhood or an urban slum. Doing some research into the recent and planned infrastructure and building projects in the area as well as the general upkeep on the existing houses may help you in this regard."

Deats says that not too much emphasis should be placed on the fact that only 34% of respondents ranked price as the most important factor. "Price is almost always a crucial element in any purchasing decision, especially in big ticket items such as property. In addition, most of the respondents who chose location as the most important factor have already factored in the price ranges of property in the various areas they are considering living in.

"Buying a home is a long term investment and is often likely to be one of the biggest purchases that most people make in their life, so it is important that buyers look at all the factors involved when making this decision," says Deats.

Nearly 80% of respondents to a new PropertyGenie poll hosted on behalf of ooba ¿ South Africa's leading bond originator ¿ cited location and price as the most important factors to them when buying a home.

44% of respondents put location of the property at the top of their list of deciding factors, while 34% chose price. Views were most important to 10% of respondents, while proximity to work / school received 7% of the votes. Parking received 3%, while 2% said the fact that a property was newly refurbished was the key factor in their purchasing decision.

According to Craig Deats at ooba, the old adage of location, location, location still rings true for many South African homebuyers.

"While it is no secret that location plays a crucial role in determining the value of a property, many people still choose to ignore this fact, which can be extremely costly when buying primarily for investment purposes."

He adds that it is also important to get some idea of what the area you are looking to buy in will look like 10 years down the line. "The demographics of an area can change relatively quickly. What could be classed as a vibey student area today could be on its way to becoming either a chic and trendy neighourhood or an urban slum. Doing some research into the recent and planned infrastructure and building projects in the area as well as the general upkeep on the existing houses may help you in this regard."

Deats says that not too much emphasis should be placed on the fact that only 34% of respondents ranked price as the most important factor. "Price is almost always a crucial element in any purchasing decision, especially in big ticket items such as property. In addition, most of the respondents who chose location as the most important factor have already factored in the price ranges of property in the various areas they are considering living in.

"Buying a home is a long term investment and is often likely to be one of the biggest purchases that most people make in their life, so it is important that buyers look at all the factors involved when making this decision," says Deats.

Nearly 80% of respondents to a new PropertyGenie poll hosted on behalf of ooba ¿ South Africa's leading bond originator ¿ cited location and price as the most important factors to them when buying a home.

44% of respondents put location of the property at the top of their list of deciding factors, while 34% chose price. Views were most important to 10% of respondents, while proximity to work / school received 7% of the votes. Parking received 3%, while 2% said the fact that a property was newly refurbished was the key factor in their purchasing decision.

According to Craig Deats at ooba, the old adage of location, location, location still rings true for many South African homebuyers.

"While it is no secret that location plays a crucial role in determining the value of a property, many people still choose to ignore this fact, which can be extremely costly when buying primarily for investment purposes."

He adds that it is also important to get some idea of what the area you are looking to buy in will look like 10 years down the line. "The demographics of an area can change relatively quickly. What could be classed as a vibey student area today could be on its way to becoming either a chic and trendy neighourhood or an urban slum. Doing some research into the recent and planned infrastructure and building projects in the area as well as the general upkeep on the existing houses may help you in this regard."

Deats says that not too much emphasis should be placed on the fact that only 34% of respondents ranked price as the most important factor. "Price is almost always a crucial element in any purchasing decision, especially in big ticket items such as property. In addition, most of the respondents who chose location as the most important factor have already factored in the price ranges of property in the various areas they are considering living in.

"Buying a home is a long term investment and is often likely to be one of the biggest purchases that most people make in their life, so it is important that buyers look at all the factors involved when making this decision," says Deats.

The oobarometer price index recorded a year-on-year nominal price increase of 9.7% to R850 864 from R775 559, a slight deceleration from the 11.4% year-on-year price growth recorded in February.

According to ooba CEO, Saul Geffen, while there are supply side risks, the improving economic fundamentals, rising levels of activity, along with the surprise cut in interest rates announced in March, should help to sustain the momentum we have already witnessed. "The interest rate cut is also good news for current homeowners still under pressure from the difficult economic environment," Says Geffen.

The ooba statistics also show that the average approved bond size increased 14.3% year-on-year in March to R679 114 from R593 902, in line with the rise in the average purchase price. The average deposit size as a percentage of the purchase price fell 13.7% year-on-year to 20.2%, as bank's relaxation of their lending criteria filters through.

The average bank decline ratio increased slightly from 51.1% to 52.8% in the year to March 2010, however this is related to the mix of applications.

According to the ooba results, the ratio of home loan applications that have been declined by one lender but approved by another rose 3.1% year-on-year in March from 19% to 22.1%. "This is a positive development as there is a greater chance of obtaining loan approval if declined initially by one bank," says Geffen.

"Overall, the signs are increasingly positive for the local housing market. We see a demand-driven recovery, assisted by maintained low interest rates, a continued recovery in economic growth and a more stable job market. We expect continued growth in house prices in excess of inflation for the remainder of 2010."

Full oobarometer analysis:

Indicator	March 2010	March 2009	Change yr on yr (Mar 10 vs Mar 09)	February 2010	Change month on month (Mar10 to Feb 10)
Avg purchase price	R 850,864	R 775,559	9.7%	R 895,031	-4.9%
Avg purchase price of  first time buyer	R 596,357	R 545,1856	9.4%	R 633,033	-5.8%
Avg approved bond size	< p align="center">679,114	< p align="center">R 593,902	14.3%	R 721,107	-5.8%
Avg deposit (as % of purchase price)	20.2% (R 171,750)	23.4% (R 181,657)	-13.7%	19.4% (R173,924)	4.1%
Avg age of applicant	37	37	no change	36	1 Year Older
Avg decline ratio	52.8%	51.1%	1.7%	51.5%	1.3%
Ratio of applications declined by one lender but approved by another	22.1%	19.0%	3.1%	21.9%	0.2%

The oobarometer price index recorded a year-on-year nominal price increase of 9.7% to R850 864 from R775 559, a slight deceleration from the 11.4% year-on-year price growth recorded in February.

According to ooba CEO, Saul Geffen, while there are supply side risks, the improving economic fundamentals, rising levels of activity, along with the surprise cut in interest rates announced in March, should help to sustain the momentum we have already witnessed. "The interest rate cut is also good news for current homeowners still under pressure from the difficult economic environment," Says Geffen.

The ooba statistics also show that the average approved bond size increased 14.3% year-on-year in March to R679 114 from R593 902, in line with the rise in the average purchase price. The average deposit size as a percentage of the purchase price fell 13.7% year-on-year to 20.2%, as bank's relaxation of their lending criteria filters through.

The average bank decline ratio increased slightly from 51.1% to 52.8% in the year to March 2010, however this is related to the mix of applications.

According to the ooba results, the ratio of home loan applications that have been declined by one lender but approved by another rose 3.1% year-on-year in March from 19% to 22.1%. "This is a positive development as there is a greater chance of obtaining loan approval if declined initially by one bank," says Geffen.

"Overall, the signs are increasingly positive for the local housing market. We see a demand-driven recovery, assisted by maintained low interest rates, a continued recovery in economic growth and a more stable job market. We expect continued growth in house prices in excess of inflation for the remainder of 2010."

Full oobarometer analysis:

Indicator	March 2010	March 2009	Change yr on yr (Mar 10 vs Mar 09)	February 2010	Change month on month (Mar10 to Feb 10)
Avg purchase price	R 850,864	R 775,559	9.7%	R 895,031	-4.9%
Avg purchase price of  first time buyer	R 596,357	R 545,1856	9.4%	R 633,033	-5.8%
Avg approved bond size	< p align="center">679,114	< p align="center">R 593,902	14.3%	R 721,107	-5.8%
Avg deposit (as % of purchase price)	20.2% (R 171,750)	23.4% (R 181,657)	-13.7%	19.4% (R173,924)	4.1%
Avg age of applicant	37	37	no change	36	1 Year Older
Avg decline ratio	52.8%	51.1%	1.7%	51.5%	1.3%
Ratio of applications declined by one lender but approved by another	22.1%	19.0%	3.1%	21.9%	0.2%

The oobarometer price index recorded a year-on-year nominal price increase of 9.7% to R850 864 from R775 559, a slight deceleration from the 11.4% year-on-year price growth recorded in February.

According to ooba CEO, Saul Geffen, while there are supply side risks, the improving economic fundamentals, rising levels of activity, along with the surprise cut in interest rates announced in March, should help to sustain the momentum we have already witnessed. "The interest rate cut is also good news for current homeowners still under pressure from the difficult economic environment," Says Geffen.

The ooba statistics also show that the average approved bond size increased 14.3% year-on-year in March to R679 114 from R593 902, in line with the rise in the average purchase price. The average deposit size as a percentage of the purchase price fell 13.7% year-on-year to 20.2%, as bank's relaxation of their lending criteria filters through.

The average bank decline ratio increased slightly from 51.1% to 52.8% in the year to March 2010, however this is related to the mix of applications.

According to the ooba results, the ratio of home loan applications that have been declined by one lender but approved by another rose 3.1% year-on-year in March from 19% to 22.1%. "This is a positive development as there is a greater chance of obtaining loan approval if declined initially by one bank," says Geffen.

"Overall, the signs are increasingly positive for the local housing market. We see a demand-driven recovery, assisted by maintained low interest rates, a continued recovery in economic growth and a more stable job market. We expect continued growth in house prices in excess of inflation for the remainder of 2010."

Full oobarometer analysis:

Indicator	March 2010	March 2009	Change yr on yr (Mar 10 vs Mar 09)	February 2010	Change month on month (Mar10 to Feb 10)
Avg purchase price	R 850,864	R 775,559	9.7%	R 895,031	-4.9%
Avg purchase price of  first time buyer	R 596,357	R 545,1856	9.4%	R 633,033	-5.8%
Avg approved bond size	< p align="center">679,114	< p align="center">R 593,902	14.3%	R 721,107	-5.8%
Avg deposit (as % of purchase price)	20.2% (R 171,750)	23.4% (R 181,657)	-13.7%	19.4% (R173,924)	4.1%
Avg age of applicant	37	37	no change	36	1 Year Older
Avg decline ratio	52.8%	51.1%	1.7%	51.5%	1.3%
Ratio of applications declined by one lender but approved by another	22.1%	19.0%	3.1%	21.9%	0.2%

March 2010 - With house prices firmly back on an upward trend and banks beginning to relax their lending criteria for home loans, consumers are increasingly looking to get back onto the housing ladder.

As the property market becomes more competitive, however, it is vital for consumers to make sure they are well prepared and can act quickly when an offer is accepted.

Craig Deats, Executive Director of ooba ¿ South Africa¿s leading bond origination company ¿ has the following advice for potential homebuyers when applying for a home loan to ensure they have the ultimate opportunity for success on their bond applications.

1.Make sure you are aware of all the costs involved in buying a home. In addition to arranging a home loan and paying a deposit there are a number of other costs involved including legal costs, transfer duty, bond registration fee and bank charges. These will need to be paid in order to complete the process.

2.It is advisable to have a clean credit record before applying for a home loan. As a result of the National Credit Act and current market conditions, banks have tightened their lending criteria and a negative credit record may impact the result of your home loan application.

3.Provide your bank or bond originator upfront with all required information and documentation requested. Each bank has their own set of criteria so ensure that you have met the requirements of each lender.

4.Make use of a reputable bond originator, who can assist you by facilitating bond negotiations with all major lenders in one simple process from prequalification to registration, with less hassle and minimal paperwork. They also provide regular feedback of progress on your application.

5.Shop around with multiple lenders. According to the latest ooba statistics, 19.8% of applications in January 2010 that were declined by one lender were approved by another, indicating that it is important to approach multiple lenders to ensure a positive outcome on your home loan. Shopping around also ensures that you get the best rate on offer.

March 2010 - With house prices firmly back on an upward trend and banks beginning to relax their lending criteria for home loans, consumers are increasingly looking to get back onto the housing ladder.

As the property market becomes more competitive, however, it is vital for consumers to make sure they are well prepared and can act quickly when an offer is accepted.

Craig Deats, Executive Director of ooba ¿ South Africa¿s leading bond origination company ¿ has the following advice for potential homebuyers when applying for a home loan to ensure they have the ultimate opportunity for success on their bond applications.

1.Make sure you are aware of all the costs involved in buying a home. In addition to arranging a home loan and paying a deposit there are a number of other costs involved including legal costs, transfer duty, bond registration fee and bank charges. These will need to be paid in order to complete the process.

2.It is advisable to have a clean credit record before applying for a home loan. As a result of the National Credit Act and current market conditions, banks have tightened their lending criteria and a negative credit record may impact the result of your home loan application.

3.Provide your bank or bond originator upfront with all required information and documentation requested. Each bank has their own set of criteria so ensure that you have met the requirements of each lender.

4.Make use of a reputable bond originator, who can assist you by facilitating bond negotiations with all major lenders in one simple process from prequalification to registration, with less hassle and minimal paperwork. They also provide regular feedback of progress on your application.

5.Shop around with multiple lenders. According to the latest ooba statistics, 19.8% of applications in January 2010 that were declined by one lender were approved by another, indicating that it is important to approach multiple lenders to ensure a positive outcome on your home loan. Shopping around also ensures that you get the best rate on offer.

March 2010 - With house prices firmly back on an upward trend and banks beginning to relax their lending criteria for home loans, consumers are increasingly looking to get back onto the housing ladder.

As the property market becomes more competitive, however, it is vital for consumers to make sure they are well prepared and can act quickly when an offer is accepted.

Craig Deats, Executive Director of ooba ¿ South Africa¿s leading bond origination company ¿ has the following advice for potential homebuyers when applying for a home loan to ensure they have the ultimate opportunity for success on their bond applications.

1.Make sure you are aware of all the costs involved in buying a home. In addition to arranging a home loan and paying a deposit there are a number of other costs involved including legal costs, transfer duty, bond registration fee and bank charges. These will need to be paid in order to complete the process.

2.It is advisable to have a clean credit record before applying for a home loan. As a result of the National Credit Act and current market conditions, banks have tightened their lending criteria and a negative credit record may impact the result of your home loan application.

3.Provide your bank or bond originator upfront with all required information and documentation requested. Each bank has their own set of criteria so ensure that you have met the requirements of each lender.

4.Make use of a reputable bond originator, who can assist you by facilitating bond negotiations with all major lenders in one simple process from prequalification to registration, with less hassle and minimal paperwork. They also provide regular feedback of progress on your application.

5.Shop around with multiple lenders. According to the latest ooba statistics, 19.8% of applications in January 2010 that were declined by one lender were approved by another, indicating that it is important to approach multiple lenders to ensure a positive outcome on your home loan. Shopping around also ensures that you get the best rate on offer.

February was also the ninth consecutive month of positive house price growth, which signifies that the recovery in property prices continues to gather momentum.

The average approved bond size showed a year-on-year increase of 13.9% and a month-on-month increase of 13.8%, which is in line with the higher purchase prices and lower deposits recorded in February. The average deposit has dropped by 8.9% over the 12-month period. "The banks more relaxed deposit criteria has stimulated buyer activity and supported increased application volumes," says Saul Geffen, CEO of ooba.

According to the oobarometer, the average purchase price of the first time buyer has also shown a year-on-year price growth of 11.4%.

The average bank decline ratio has not dropped significantly over the last few months. While there has been an increase in approval rates for applications with deposits, this is being offset by the higher percentage of applications for 100% bonds, which the banks are still cautious on, and which have lower approval rates.

The ratio of applications declined by one lender but approved by another, reflected a month-on-month increase of 2.1% in February. "This indicates that the opportunity to secure an approval from another bank when the initial bank has declined the application is beginning to improve," says Geffen.

"From the statistics over the last nine months, it is evident that house prices are firmly back in positive territory, and we expect property prices to continue to rise throughout 2010."

Full oobarometer analysis:

Indicator	February 2010	February 2009	Change yr on yr (Feb 10 vs Feb 09)	January 2010	Change month on month (Feb10 to Jan 10)
Avg purchase price	R 895,031	R 803,642	11.4%	R 830,513	7.8%
Avg purchase price of  first time buyer	R 633,033	R 568,066	11.4%	R 585,992	8.0%
Avg approved bond size	< p align="center">R721,107	< p align="center">R 632,837	13.9%	R 633,467	13.8%
Avg deposit (as % of purchase price)	19.4% (R 173,924)	21.3% (R 170,805)	-8.9%	23.7% (R197,046)	-18.1%
Avg age of applicant	36	37	1 year younger	37	1 Year Younger
Avg decline ratio	51.5%	50.2%	1.3%	50.4%	1.1%
Ratio of applications declined by one lender but approved by another	21.9%	21.8%	-0.1%	19.8%	2.1%

According to Saul Geffen, CEO of ooba, many would-be homeowners, however, will be left disappointed, as banks remain reluctant to grant the full amounts applied for. "While the granting of 100% home loans is a sign of confidence in the local property market the reality is that the implications of the National Credit Act mean that consumers still have to meet the strict affordability criteria in order to qualify."

The ooba statistics show that the proportion of consumers applying for 100% bonds has jumped to 44% of overall applications in December 2009, up from 18% three months earlier. However, the approval rate on these applications are significantly lower, and nearly half of the bank approvals on these 100% bond applications are made subject to deposits.

Despite the average Rand value per application having remained consistent between December and January, with the higher proportion of 100% LTV applications and the reluctance by banks to grant the full 100% of loan amounts applied for, there has been a 10.5% drop in the average bond size from R707 760 in December 2009 to R633 467 in January 2010. Similarly, it has also contributed to the 27.4% month on month increase in the average deposit size during January.

The oobarometer price index recorded a 4.9% year-on-year rise in the average house purchase price in January to R830 513 from R791, 552 in January 2009. "This is the eight consecutive month of year-on-year price increases, which clearly indicates that the property market is steadily recovering," says Geffen.

The average bank decline ratio showed an improvement of 2.1%. The ratio of applications declined by one lender but approved by another, reflected a month-on-month increase of 3.2% in January indicating that banks are becoming more competitive for business.

"The increased competition between banks for new customers, coupled with improved demand and rising house prices should all combine to support the continued recovery of the local property market in 2010," says Geffen.

Full oobarometer analysis:

Indicator	January 2010	January 2009	Change yr on yr (Jan 10 vs Jan 09)	December 2009	Change month on month (Jan 10 to Dec 09)
Avg purchase price	R 830,513	R 791,552	4.9%	R 870,051	-4.5%
Avg purchase price of  first time buyer	R 585,992	R 556,575	5.3%	R 596,841	-1.8%
Avg approved bond size	< p align="center">R633,467	< p align="center">R 624,624	1.4%	R 707,760	-10.5%
Avg deposit (as % of purchase price)	23.7% (R 197,046)	21.0% (R 166,928)	12.9%	18.6% (R162,291)	27.4%
Avg age of applicant	37	38	1 year younger	37	No change
Avg decline ratio	50.4%	52.5%	-2.1%	50.3%	0.1%
Ratio of applications declined by one lender but approved by another	19.8%	22.6%	-2.8% decrease	16.6%	3.2

With more than 40% of all home loan applications still being declined in December 2009, potential homeowners may still be finding it tough to obtain financing. However, the decline ratio is expected to fall as a result of the gradual improvement expected in the local property market in 2010.

Latest figures provided by ooba ¿ South Africa's leading bond origination company, show that 42% of home loan applications were ultimately rejected by banks in December 2009.

According to Rhys Dyer, Chief Operating Officer of ooba, the current decline rates are well above the effective 20% decline ratio experienced during the heady days of 2003 to 2006, a time of strong property market conditions.

"These decline rates were, however, prior to the introduction of the National Credit Act (NCA). Our view is that the introduction of the NCA has influenced decline rates on a structural basis and it is unlikely that we will see decline rates at these historic lows again. There is however significant scope for improvement from current levels with property market recovery over the short term."

Dyer says lack of affordability still remains a key reason for high decline ratios.

"Affordability under the NCA is measured by net disposable income. Consumers need to show sufficient net income after tax, living expenses and the repayment of other debt to afford the bond repayment. With many consumers having been hit hard by the economic recession, and the increases in the cost of living they simply cannot meet these criteria.

"Many consumers are also recovering from an overhang of historic debt and a high percentage still have impaired credit records," says Dyer.

Dyer says that because every bank applies different credit criteria in assessing a home loan, it is essential that consumers shop around and don't merely accept the credit decision from only one institution. Almost a fifth of ooba's home loan applications that were declined by one lender in December 2009 were accepted by another lender.

"Further to the credit criteria, there is also the issue of pricing. Pricing between banks remains a key reason to shop around. The rates being offered to the same client may vary from bank to bank.

He says that in the current environment, using a reputable bond originator is a useful way to improve the chances of a successful home loan application.

"Bond originators can assist in shopping around to the different banks and ensure that all the required information is obtained and correctly reflected before submission of the home loan. As each bank has differing requirements in terms of their application information, bond originators have developed systems to ensure that once the information is obtained from the customer it is systematically formatted to meet each bank's application formats and requirements. This saves the consumer from having to go through a separate and time consuming application process with each bank."

With the property market beginning to show signs of a recovery, it is more important than ever to ensure your home is correctly priced.

Jenny Rushin, property finance manager at ooba, SA's leading mortgage originator, said that a property listed at the right price will give sellers the greatest chance of attracting buyers.

"A lot of properties on the market have been sitting for months and may continue to sit despite the predicted recovery as the property is overvalued."

Here are ooba's 5 common valuation errors to avoid:

1: Skipping the research

Don't put your property on for what you think it is worth, what your friends think it might go for or even what prices are listed for in your area.

Instead, ensure you have an expert agent look at the recent sales of homes in your area that are similar to yours. This sort of comparative market analysis will give a much more realistic idea of what your home is worth.

An inflated price will scare away potential buyers especially in current conditions when bargains can be found.

2: Getting emotional

It's natural to become emotionally attached to your home but buyers are looking for a sound investment and likely to view your home dispassionately; they simply won¿t pay extra for your sentimental attachment.

Hard as it is, it's best to stay objective by looking at the statistics of actual comparable sales and remind yourself that you are involved in a business deal.

Remember: don¿t take low offers personally. It could be the start of a negotiation that ends in a sale.

3: Going with the first agent

Make sure you shop around for the best deal; it is always worth getting a valuation from a few different agents in your area and asking them to back up their valuations with comparable sales data.

You can also consult with a professional property evaluator who will be able to give you the fairest pricing.

4: Pricing too high from the start

Agents will tell you that the first couple of weeks on the market are your most crucial time. If your home enters the market overpriced, many buyers will overlook it from the start because it will be out of their range and savvy buyers, who have been looking around for a while, have a good sense of the suitable pricing. By the time you reduce the price to fair market value, many potential buyers will have already found something else.

Other buyers may initially be interested in your new low price, but they'll also see that your home has been sitting on the market for some time. And that could lead them to believe there is something wrong with the property or think that you must be will be desperate and willing to accept a very low offer. Conversely, beware of under pricing which will have a detrimental effect on the home owner¿s personal wealth.

5: Chasing the market

If you list your home too high to begin with, you may find yourself making incremental price drops but never quite catching up with the market. And when a home has had multiple price reductions, buyers may view it as stale.

It's best to work with your agent to re-evaluate market conditions and determine the fair market value of your home.

South African banks have loosened their lending criteria which has supported a revival in the property market and helped new buyers enter the market says South Africa¿s leading mortgage originator, ooba.

"For the last few months banks have continued to relax their lending policies, which is positive news for potential home buyers and the property market as a whole," says Saul Geffen, chief executive of ooba.

Banks, across the board, have relaxed their loan-to-value (LTV) requirements. This is a strong signal that the banks' appetite to lend has changed for the good, and that the banks' view is now for the recovery of the property market and of house prices.

Three of the four big banks are now offering 100% loans with one of them offering 95% that has opened the financing taps for homebuyers.

"This means that banks will approve the full value of the property without requiring large deposits which became the norm since last July," states Geffen. "It is also positive for home owners who have been trying to sell as improved affordability of potential buyers, boosted by improved access to credit, will support a recovery in the property market."

The latest data from the September oobarometer shows that the average deposit required is far more affordable at 12.5%. This is a significant improvement since July this year where deposits required were up to a high of 24.2%. The decrease in deposits over the last few months will reduce the barriers to entry for purchasing a property.

"Those who tried to apply for loans earlier this year and were rejected because they didn't have the required deposit should try again," suggests Geffen. "With the relaxation of lending policies there should be a much higher chance now of being approved for a loan on favourable terms."

Another positive trend for consumers is that banks have become more competitive on interest rate concessions. For the first time since early 2008 banks with generally more relaxed credit criteria are losing out to banks with better rate concessions.

"More competition amongst banks for non-bank customers means that potential home buyers who have not been approved for a loan by one bank, are likely to have success with another bank," says Geffen.

ooba has seen a 21% surge in approved bonds from August to September and expects a further 18% increase for October. If the 18% increase in October is achieved, ooba will have experienced an 84% growth in the value of approved loans since April this year.

Geffen recommends that consumers looking for the best deal on home loans should make use of a mortgage originator.

"Originators have the ability to speedily shop around for the best deal and offer independent advice, all at no cost or obligation," concludes Geffen.

South Africa¿s leading bond origination company, ooba, has seen a 55% increase in the value of approved loans from April to September this year, with a 21% surge from August to September alone.

"We continue to see a marked improvement in application volumes as well as increases in approval rates," says Saul Geffen, chief executive of ooba.

"ooba has recorded continued increases in the value of approved bonds for the past five months, and mid-month data points to a further 18% increase for October," continues Geffen. "If the 18% growth for October is achieved, it will mean an 84% growth in ooba¿s approved loans since April."

The change in banks' lending criteria and the impact of the lower interest rates has resulted in an improvement in consumers purchasing ability. ooba has seen a surge in the value of approved bonds as improved affordability and sentiment translated into increased transaction volumes and approval rates.

There has also been an increase in average loan sizes as a result of the shift in banks lending criteria to lower deposit requirements, with all four big banks now offering 100% loans.

"One of the biggest drivers of a market recovery is bank lending and we have seen a marked increase in competitiveness between the banks," Geffen said.

"Banks are now targeting non-bank clients and rate concessions are becoming more aggressive. The improved appetite to lend will support the increased demand for property as transaction volumes continue to pick up." concludes Geffen.

With banks beginning to relax their lending policies supporting a revival in the property market now is the time to apply for a bond, advises South Africa's biggest mortgage originator, ooba.

"With the relaxation of lending policies there should be a much improved chance of being approved for a loan on favourable terms." says Kay Geldenhuys, property finance manager at ooba. "Banks are once again offering 100% loans and the current lower interest rates make it a better time for consumers looking to buy."

ooba's tips on getting that bond approval.

Checking affordability

Before you even apply for a loan, check whether the property is affordable, suggests Geldenhuys.

"Determining the right price range is an essential first step to avoid wasting time looking at unsuitable properties. A property finance consultant will take you through the exercise of establishing what you can afford, taking into account your specific financial requirements. Monthly repayment affordability is generally calculated at 25 to 30 percent of joint gross income, but other criteria, including existing debt commitments, may affect the size of the loan that the bank will grant. Remember that the 'hidden costs' (transfer and bond registration fees) usually have to be paid upfront, and add a sizeable amount to the cost."

Get prequalified

One way to ensure that the loan you apply for will be granted is to get a prequalification. Companies, such as ooba, will at no cost, prequalify you for a certain bond amount which takes the stress out of applying for a bond once you have decided on buying a property. An additional positive factor is that buyers who are prequalified are in a much stronger position to negotiate with sellers.

Check your credit record

Bond applications may be declined for several reasons: you may not be able to afford the monthly loan repayments, or may require a 100% loan that would push the repayments beyond your reach. Another critical consideration is your credit profile, says Geldenhuys.

"This includes your employment history and consumer bureaux results, which provide a picture of your debt and payment history. If the bank considers you a good credit risk, it will assess the value of the property to be purchased. If this too meets all the relevant criteria, the loan is usually granted. The mortgage originator also often motivates the merits of a particular loan application to the bank's credit manager."

To improve your credit record Geldenhuys suggests cancelling out-of-date credit cards; and ensure that you pay all instalments on existing debt by the due date every month.

Submit the correct information

To assist the bank in determining its risk, you will be required to provide personal information such as bank statements, salary slips, a statement of assets and liabilities, a statement of your monthly expenses and information on your credit history, including whether you have ever been insolvent.

If you go through an originator, such as ooba, they will ensure you have all the correct paper work to avoid unnecessary delays.

Get the best interest rate

The lower the bank's risk in lending funds to a particular borrower, the better the rate it will offer that individual. In calculating its risk, it will consider factors such as the amount of equity you are willing to invest into the property, i.e. your deposit; the size of the loan; and the repayment-to-income ratio (the ratio between the bond payment and the buyer¿s income).

The type of bond you apply for, your credit history and the investment value of the property you intend buying also affect the rate you will be offered. Shop around and negotiate with various banks to ensure you get the best package. A convenient way to do this is through the services of a mortgage originator who facilitate it all on your behalf as a free service."

"While a deposit is not always required, try to put down 20% or more if you can, as the bank is more likely to offer you a better rate as the risk of the loan is reduced," suggests Geldenhuys.

Use a mortgage originator

Finally, Geldenhuys suggests that consumers looking for the best deal on home loans should make use of a mortgage originator.

Mortgage originators specialise in shopping around between banks and negotiating the best deal for the customer for free.

"Obtaining a preferential rate of just 0,1% below the prime rate can make a big difference to your monthly repayments. However, in negotiating the best package, the mortgage originator needs to take more than just the rate into account and will structure a package that best suits the individual¿s needs overall.

"With the property market beginning to perk up and banks loosening lending criteria as well as granting 100% loans, now is the best time in the last two years to apply for a bond," concludes Geldenhuys.

Most people think that a home makeover is a taking-out-a-second-mortgage event that means you have to move in with your mother-in-law while builders annex your home; but it needn¿t be so traumatic according to SA's leading bond originator.

Jenny Rushin, property finance manager at ooba, said: "Sprucing up your home can be quick and simple that will make it nicer to live in and also add value to your bricks and mortar."

Here are ooba's top tips to spruce your pad:

1. Instant kitchen update 2. Lick of paint 3. Guttering

Whether a section needs complete replacing, a small fix or just to be emptied and tidied, it's best to get it done in the dry season. If you are in Cape Town, get it done on a dry day.

4. Renovate your furniture

The look of bare wood chairs or tables can be an attractive feature in any room. But if they've started to look worn and dull in colour there is a quick solution sanding. When the wood is smooth add a thin layer of varnish, ensuring that you move your brush in the direction of the wood grain.

5. Finishing touches

Throws, cushions and candles are a cheap way to create a warm, homely feel. A throw chosen in a corresponding colour to the room of choice, paired with clashing cushion covers adds a touch of luxury to both a living room and bedroom. Fragranced candles can also be strategically placed to highlight certain areas of the room while leaving a pleasing scent.

6. Bathroom tidy

Due to their constant use, bathrooms are often the first places that start showing general wear and tear. Replacing your toilet seat or rusted taps with a more modern version can instantly update the room¿s appearance.

Chipped or broken tiles around the bath can also date your bathroom, making it look dingy and dirty. Re-grouting it will ensure your space looks clean and tidy for longer.

7. The entrance

One of the most prominent features of any home is the front door, as it's the first and last thing visitors will see. A speedy repaint or updated doorknob instantly revives homes' appearance.

You could also position a simple hanging basket by your front door to add some colour pizzazz to your home.

"This is the fifth consecutive month that the oobarometer has shown a rise in house prices and it is the biggest increase within that period," says Saul Geffen, chief executive of ooba.

The average purchase price according to the oobarometer was R820,885 last month compared to R746,654 in October 2008. The month-on-month purchase price also shows a nominal increase of 1.8% from R806,494 in September this year.

The average purchase price for first time buyers has also shown a large year-on-year increase of 10.7% and a month-on-month increase of 3.7%.

"The drop in interest rates and banks loosening their lending criteria, has also positively affected the affordability of first time buyers and we are seeing an increase in activity from first time buyers," says Geffen.

The year-on-year average approved bond size has increased by 8.9%, from R636,339 in October 2008 to R693,008 in October 2009.

The average deposit as a percentage of purchase price has increased slightly in October, to 15.6% compared 12.5% in September, but is still considerably lower than the 23.1% in August this year. The change to lower deposits is a permanent shift as a result of relaxed bank requirements, however the changing mix of business will continue to fluctuate the monthly data for some time.

The average bank decline ratio is slightly up at 49.6%, compared to 48.4% in September. This slightly higher decline rate should be understood in the context of the significant increases in application volumes, rather than increases in bank rejections. Despite lenders having generally increased approval rates, a higher proportion of applications are now not being approved due to an increase in the proportion of marginal applicants who are trying to take advantage of the improved lending environment, particularly 100% loans which have stricter criteria to fulfil.

18.6% of applications which were initially declined in October were subsequently approved by another lender, which is marginally lower than September¿s ratio of 19.5%. This should also be seen in the context of the increased application volumes.

"The outlook for the property market is positive, with all important drivers such as increased application volumes, increased approvals, further relaxation of bank lending criteria and increased competitiveness amongst lenders indicating that the improvement in the market will be sustained," concludes Geffen.

Full oobarometer analysis:

Indicator	October 2009	October 2008	Change yr on yr (Oct 09 vs Oct 08)	September 2009	Change month on month (Oct 09 to Sep 09)
Avg purchase price	R 820,885	R 746,654	9.9%	R 806,494	1.8%%
Avg purchase price of  first time buyer	R597,075	R 539,110	10.7%	R 575.811	3.7%
Avg approved bond size	< p align="center">693,008	< p align="center">R 636,339	8.9%	R 705,744	-1.8%%
Avg deposit (as % of purchase price)	15.6% (R 127,877)	14.8% (R 110,315)	5.4%	12.5% (R100,750)	24.8%
Avg age of applicant	36	35	1 year older	37	1 Year Younger
Avg decline ratio	49.6%	49.6%	No Change	48.4%	1.2% Increase
Ratio of applications declined by one lender but approved by another	18.6%	34.6%	16.0% decrease	19.5%	0.9% decrease

The September oobarometer price index recorded an increase in the year-on-year house prices of 1.8%.

"The September oobarometer continues to reflect an improvement in year-on-year house prices," says Saul Geffen, chief executive of ooba. "This is the fourth consecutive month that the oobarometer has reported rising house prices and is clear evidence that the market is on the road to recovery."

The average purchase price according to the oobarometer was R806,494 last month compared to R791,478 in September 2008.

The month-on-month average purchase price has also increased by 1.4% from R795,241 in August this year.

"ooba also saw a surge of 21% in the month-on-month value of approved bonds in September as improved affordability and sentiment translated into increased transaction volumes. This was supported by improved lending appetite," states Geffen.

ooba has recorded increases in the value of approved bonds for the past five consecutive months.

The year-on-year average approved bond size has increased by 8.2%, from R651,707 in September 2008 to R705,744 in September this year. The month-on-month bond size has also increase by 15.5% from R611,026 in August this year.

There has been a substantial reduction in the average deposit as a percentage of purchase price in both the month-on-month data and the year-on-year data as banks loosen lending criteria and offer 100% loans.

"The main contributor to the significant drop in average deposits as a percentage of purchase price is a result of the shift in banks lending criteria to lower deposit requirements, with all four big banks now offering 100% loans," states Geffen. "The improved appetite to lend will support the increased demand for property as transaction volumes continue to pick up."

The year-on-year average deposit as percentage of purchase price shows a 28.9% reduction. Buyers now require an average deposit of 12.5% compared to 17.6% last year. There was a significant month-on-month reduction from an average deposit of 23.1% in September.

The average purchase price of a first time buyer was R575,811 in September this year compared to R554,688 in September last year showing a 3.8% rise. This is also an increase of 4.7% from R549,949 in August this year.

The average bank decline ratio shows an improvement and is now at 48.4%, a 3.6% improvement on the previous year¿s 52%.

"One of the biggest drivers of a market recovery is bank lending and we have seen an improvement in competitiveness between the banks over the past five months and an increase in approval rates," Geffen said. "Banks are now targeting non-bank clients and rate concessions are becoming more aggressive."

Full oobarometer analysis:

Indicator	September 2009	September 2008	Change yr on yr (Sep 09 vs Sep 08)	August 2009	Change month on month (Sep 09 to Aug 09)
Avg purchase price	R 806,494	R 791,478	1.8%	R 795,241	1.4%%
Avg purchase price of  first time buyer	R575,811	R 554,688	3.8%	R549,949	4.7%
Avg approved bond size	< p align="center">705,744	< p align="center">R 651,707	8.2%	R 611,026	15.5%
Avg deposit (as % of purchase price)	12.5% (R 100,750)	17.6% (R 139,771)	-28.9%%	23.1% (R184,215)	-47.1%
Avg age of applicant	37	37	No change	36	1 Year Older
Avg decline ratio	48.4%%	52.0%	3.6% decrease	45.1%	3.3% increase
Ratio of applications declined by one lender but approved by another	19.5%	37.3%	17.8% decrease	19.2%	0.3% increase

With house price indicators like the oobarometer perking up, smart buyers are slowly returning to the market and need to be armed with how to make the best purchase possible.

Ben Seymour-Brown, manager of group direct sales at ooba, said: "We expect more people to return to the property market this year and certainly next as the economy recovers, the effect of lower interest rates is felt and confidence returns to bricks and mortar investment.

"Even though buying a home is fundamental to wealth creation, it is one of the biggest purchases most people are likely to make and they need to be well informed."

ooba's tips for first time home buyers.

1. Location, location, location Remember that one of the most important aspects of a home's value is the area it's in. Research the area and check out transport links as well as schools. If your favourite area is too pricey, buy in an adjoining area. Buying a home that needs some work is another option as this can be done over time.

2. Budget Before you start looking at properties, calculate how much you can actually afford. Experienced originators like ooba can, free of charge, guide you through the mass of paperwork and the requirements of the National Credit Act to work out what you can afford. ooba advises buyers to get pre-approved for a home loan so you know exactly what you can afford before you start the hunt.

3. Property wishlist Before you start looking for a property make a list of everything you want and need in a home. Use this as a base guide when hunting for properties to help focus your search. Property listings websites like propertygenie.co.za allow you to select the criteria you want to make drawing up a shortlist very easy.

4. Choosing a mortgage Although some banks have eased their lending criteria and will again offer 100% home loans, for more high priced properties you¿ll need a deposit.

And this is where originators like ooba are invaluable. Because they work with all the banks, they source the cheapest form of finance for you. They will shop your application around at all the banks and get them to compete for your business thereby securing the best deal possible. All at no charge.

5. Estate agents A good estate agent can access invaluable market information before the public, knowing the homes just on the market and comparable prices. Ask family and friends for referrals and seek someone who is well connected, understands your needs and has experience with homes in your area and price range. Working with a good agent will make the search process much easier.

6. See what's available A great place to start your search is online on a website like propertygenie.co.za which lists properties nationwide of SA's top agents. Information such as the suburb, photos and number of bedrooms and bathrooms is available.

It is also worth looking through the local newspapers for the latest listings in your chosen area.

7. Viewing As viewings do not usually last long take a checklist with you outlining what you should be looking for and what you should be asking. Take a tape measure to ensure your stuff will fit and check the property for any problems and repair work that needs doing. It's also a great idea to write down your impressions as once you've done numerous viewings, they'll tend to blur into one.

8. Making an offer Don't be afraid to put in an offer lower than the asking price as it's still a buyers' market - and particularly if the property has been on the market for a while. You can gauge how fair an asking price is by comparing with recent sales in the area or purchasing a property valuation report for an instant valuation. A good agent will be able to show you the recent sales in the area which will be useful benchmark. Both can be good tools for negotiation.

The August oobarometer price index recorded an increase in year-on-year house prices of 6.9%.

"The latest oobarometer shows an improvement in year-on-year house prices for the third month in a row," says Rhys Dyer, chief operating officer of ooba. "There are clear signs that we are seeing the end of the downturn and that the property market is gearing itself for recovery.

"One of the biggest drivers of a market recovery is bank lending and we have seen an improvement in competitiveness between the banks over the past four months and an increase in approval rates across the board," says Dyer.

The average purchase price according to the oobarometer is R795,241 in August 2009, compared to R743,403 in August 2008.

The month-on-month average purchase price has also increased by 2.5% from R775,172 in July of this year.

While the year-on-year average bond size is still down with a 5.4% reduction, from R611,026 in August this year compared to R646,194 this time last year, the month-on-month average approved bond size has shown a 4.0% improvement from R587, 222.

The year-on-year average deposit as a percentage of purchase price continues to show an increase. Buyers currently require an average deposit of 23.1% of their purchase price in order to secure a bond, compared to the 13% in August 2008. However, this is an improvement on the average deposit required from 24.2% in July.

"The reduction in the average deposit indicates an increased appetite of the banks to lend, evidenced by the recent relaxation of deposit requirements by the major lenders" says Dyer.

The average bank decline ratio continues to show improvement and is now at 45.1%, a 5.9% improvement on the previous year¿s 51% and a 2.2% improvement on July's statistics.

"The month-on-month average bank decline ratio shows an improvement for the fourth consecutive month, a further indication that banks are moving to relax lending requirements," says Dyer. "This, coupled with the improved affordability of the average homebuyer on the back of the recent rate cuts, is good news for prospective homebuyers."

Applications declined by one lender and approved by another still show year-on-year decreases with 19.2% of applications being accepted by another lender. There is a nominal 0.5% deterioration on July's figures.

"There is mounting evidence that the property market is over the worst and is now on the road to recovery," concludes Dyer. "These `green shoots' are evident in increased applications and increased approvals, all driven by improved affordability, relaxation in the bank lending criteria, increased bank competitiveness and increased demand."

Full oobarometer analysis:

Indicator	August 2009	August 2008	Change yr on yr (Aug 09 vs Aug 08)	July 2009	Change month on month (Aug 09 to July 09)
Avg purchase price	R 795,241	R 743,403	6.9%	R 775,172	2.5%%
Avg purchase price of  first time buyer	R549,949	R 505,691	8.7%	R 545,487*	0.8%
Avg approved bond size	< p align="center">611,026	< p align="center">R 646,194	-5.4%	R 587,222	4.0%
Avg deposit (as % of purchase price)	23.1% (R 184,215)	13.0% (R 97,209)	77.6%%	24.2% (R187,950)	-4.5%
Avg age of applicant	36	37	1 year younger	37	1 Year Younger
Avg decline ratio	45.1%%	51.0%	5.9% decrease	47.3%	2.2% decrease
Ratio of applications declined by one lender but approved by another	19.2%	38.6%	19.4% decrease	19.7%	0.5% decrease

ooba said today that there were definite signs that the property market slump was coming to an end with data pointing to early signs of a market recovery.

"ooba has seen a 36% increase in home loans approved from April 2009 to August 2009," says Saul Geffen, chief executive of ooba.

"In each month from April to August we have seen the first consecutive monthly increases in application volumes since May 2007."

Geffen said that ooba had also experienced a surge in the number of home loan applications over the same period.

Since May 2007 the property market has experienced a slowdown due to a combination of factors which include the high price of debt, the introduction of the National Credit Act and banks tightening up their lending policies.

This has been exacerbated by the sub-prime crisis, the global liquidity crisis that followed this and the current global economic slowdown.

"One of the biggest drivers of a market recovery is bank lending and recently we have seen an improvement in competitiveness between the banks over the past four months and a marked increase in approval rates across the board," says Geffen.

Banks' move to relax deposit requirements is a positive for prospective homebuyers and for the property market. Over the past 4 months, the major lenders have begun to relax lending criteria, including deposit requirements.

"Banks are now targeting non-bank clients and rate concessions are becoming more aggressive."

Geffen believes that easier lending, coupled with improved affordability thanks to lower interest rates, has helped kick start the property market in South Africa.

"We have seen an improvement in the performance in ooba's mortgage origination business over the last four months with consistent increases in volumes and we expect continued positive results going forward."

Both the USA and UK property market have recently shown improvements in housing prices.

The UK housing prices rose for the fourth month in a row during August according to Nationwide, the UK's largest building society and US indicated the first monthly rise in house prices since 2006 according to the Standard & Poor's/Case Shiller index of home prices.

"We believe that the worst is behind us and that the property market is on the road to recovery."

The July oobarometer price index recorded a nominal increase in year-on-year house prices of 1%.

"The latest oobarometer shows a slight improvement in year-on-year house prices for the second time in two months," says Saul Geffen, chief executive of ooba. "Although it would be premature to suggest that this is an indication of a recovery in the property market, the mild increase is encouraging."

The average purchase price according to the oobarometer is R775,172 in July 2009, compared to R767,266 in July 2008.

The month-on-month average purchase price has however decreased by 1.1% from R784,427 in June of this year.

The trend of diminishing average bond sizes continues and the oobarometer has recorded a 6% reduction in the year-on-year average from R587,222 in July 2009 compared to R625,214 this time last year.

The month-on-month average approved bond size has also dropped 7.7% from R636,169 in June.

"The continuing drop in average bond size is a reflection of the banks' increased deposit requirements" says Geffen.

The year-on-year average deposit as a percentage of purchase price continues to show significant increases, up 30.8% from July 2008. Buyers currently require an average deposit of 24.2% of their purchase price in order to secure a bond, compared to the 18.5% in July 2008. The month-on-month data also shows an increase of 28% from the previous month.

The average bank decline ratio continues to show improvement and is now at 47.3%, a 5.1% improvement on the previous year¿s 52.4% and a 0.2% improvement on June¿s statistics.

Encouragingly, the applications declined by one lender and approved by another have also improved with 19.7% of applications now being accepted by another lender. While this is still down 19.5% from the previous year, it shows a 2.4% improvement on the June figures.

"Both the average bank decline ratio and ratio of applications declined by one lender but approved by another are starting to show positive trends," says Geffen. "This is an indication that the average homebuyer's ability to qualify for home loan finance has started to improve on the back of the recent rate cuts and increased competition amongst banks is beginning."

Full oobarometer analysis:

Indicator	July 2009	July 2008	Change yr on yr (July 09 vs July 08)	June 2009	Change month on month (July 09 to June 09)
Avg purchase price	R 775,172	R 767,266	1.0%	R 787,427	-1.1%%
Avg purchase price of  first time buyer	R545,487	R 508,241	7.3%	R 545,515*	0.0%
Avg approved bond size	< p align="center">587,222	< p align="center">R 625,214	-6.0%	R 636,169	-7.7%
Avg deposit (as % of purchase price)	24.2% (R 187,950)	18.5% (R 142,052)	30.8%%	18.9% (R148,258)	28.0%
Avg age of applicant	37	37	No change	36	1 Year Older
Avg decline ratio	47.3%%	52.4%	5.1% decrease	47.5%	0.2% decrease
Ratio of applications declined by one lender but approved by another	19.7%	39.2%	19.5% decrease	17.3%	2.4% increase

The June oobarometer price index recorded a nominal increase in year-on-year house prices of 1.2%.

"The latest oobarometer shows a very slight improvement in year-on-year house prices," says Saul Geffen, chief executive of ooba. "Rather than suggesting a recovery in the market place, this may be attributed to a shift to higher priced properties in June, given affluent homebuyers' ability to better adapt to strict bank lending practices."

The average purchase price according to the oobarometer is R774,449 in June 2008, compared to R784,427, in June 2009.

The month-on-month average purchase price has also increased nominally by 1.4% from R773,440 in May of this year.

The average purchase price of the first time buyer is showing a significant year-on-year reduction of 14.1%, and a decline of 16.8% in comparison to May 2009.

"This is a clear indication of the pressure on first time buyers where banks strict credit criteria, particularly their deposit criteria, is making entry into the property market difficult and is having a knock-on effect on property prices at this level," says Geffen.

A reduction of 6.3% in the year-on-year average approved bond size has been recorded from R679,224 in June 2008 to R636,169 June 2009, again reflecting the impact of higher bank deposit requirements. The year-on-year average deposit, as a percentage of purchase price, has increased significantly by 54.9%. Buyers now require an average deposit of 18.9% of their purchase price in order to secure a bond, compared to the 12.2% average deposit required 12 months ago. The month-on-month data shows a slight reduction in average deposits from the previous month. The inability for home buyers to fund required deposits continues to depress the property market.

The average bank decline ratio has eased and is now at 47.5%, a 2.2% improvement on the previous year's 49.7% and a 2.0% improvement on May's statistics. The moderation in the rate of bank declines suggests that buyers' affordability levels have slightly improved as a result of the lower interest rates.

However, the applications declined by one lender and approved by another continued to deteriorate, with only 17.3% of applications accepted by another lender compared to 39.4% in the same month last year and 22.6% last month.

"Expectations are that the property market will continue to be hindered by the current economic conditions until the end of 2009, with recovery predicted by mid 2010" concludes Geffen

Full oobarometer analysis:

Indicator	June 2009	June 2008	Change yr on yr (June 09 vs June 08)	Mayl 2009	Change month on month (June 09 to May 09)
Avg purchase price	R 784,427	R 774,449	1.2%	R 773,440	1.4%
Avg purchase price of  first time buyer	R 454,400	R 529,504	-14.1%	R 546,202	-16.8
Avg approved bond size	< p >636,169	< p >R 679,224	-6.3%	R 598,733	6.2%
Avg deposit (as % of purchase price)	18.9% (R 148,258)	12.2% (R 95,225)	54.9%	22.6% (R174,707)	-16.3%
Avg age of applicant	36	37	1 year younger	36	No change
Avg decline ratio	47.5%%	49.7%	2.2% decrease	49.5%	2.0% decrease
Ratio of applications declined by one lender but approved by another	17.3%	39.4%	22.1% decrease	22.6%	5.3% decrease

Wizard Financial Services (a member of the ooba group) has concluded an origination agreement with the National Housing Finance Corporation to broaden its offering to all potential home owners.

"We are very pleased to have finalised an origination relationship with the National Housing Finance Corporation (NHFC) which expands our origination offering to include the low to middle income housing market," says Rhys Dyer, chief operating officer of the ooba group.

Traditionally the lower income groups have not had easy access to home financing because of their perceived risk and the banks¿ focus on higher income groups.

With the escalation of the scale of housing delivery in this market, the low-income housing market is becoming viable and there are a range of innovative home finance products becoming available to the lower income groups. We are therefore excited about our contribution towards assisting these home-buyers in sourcing home loan finance.

The Department of Housing established the NHFC as a Developmental Finance Institution with a principle mandate of broadening and deepening access to affordable housing finance for the low and middle income housing market.

Home Front Finance (HFF) is the retail Division of the NHFC and offers innovative end user finance solutions which include borrower education and financial counseling.

They provide 100% loans up to a maximum of R400k over a maximum term of 20 years for applicants earning up to R15k with proof of one year fixed employment.

"In the current climate, where banks have significantly tightened their lending policies, the lower income market now has access to a deposit-free homeloan," points out Dyer. "Whereas the higher income market are still required to raise a deposit which varies between 5% and 30% of the purchase price of the property that they are buying"

Mortgage originators such as Wizard Financial Services offer a free service to low income homebuyers by handling all the complex paperwork and negotiating with the lenders to secure a 100% loan approval at the best home loan rate.

The May oobarometer price index recorded a marginal drop in the year-on-year houses prices of 0.5%.

"The oobarometer continues to reflect declines in year-on-year house prices, but at a slower rate," says Saul Geffen, chief executive of ooba. "We believe that the recent series of interest rate cuts has provided a turning point in the property market and that we will begin to see the market begin to stabilise by the end of the year."

The average purchase price according to the oobarometer R777,277 in May 2008 compared to R773,440 in May 2009.

The month-on-month has also dropped marginally by 0.9% from R767,769 in April 2009.

A 9.9% reduction in the year-on-year average bond size has been recorded from an average house price of R665,192 in May 2008 to R598,733 in May 2009. There has also been 1.4% reduction in the month-on-month average.

The year-on-year average deposit as percentage of purchase price continues to show a significant increase, up to 22.6% in May of this year compared to 14.4% last year. The month-on-month average is also up by 8.1%, from a 20.9% average deposit as percentage of purchase price in April.

"There has been a significant increase in deposits now required to purchase a home," says Geffen. "The lack of funds for deposits, despite good credit scores, is a big contributor to the current sluggishness in the property market."

The average bank decline ratio and the ratio of applications declined by one lender approved by another continue to show annual deterioration. The average decline ratio is at 49.5% compared to 46.8% in May 2008. Only 22.6% of applications declined by one lender are now approved by another, compared to 39.5% in May 2008.

However, month-on-month data shows slight improvement in both areas with a 0.5% decrease in the average decline ratio from 50.01% in April 2009, and a 6.9% absolute increase in ratio of applications declined by one lender but approved by another from 15.7% in April this year.

Whilst the property market is still in a downward cycle, general sentiment indicates that it will stabilise by the end of the year and begin recovery by mid 2010.

Full oobarometer analysis:

Indicator	May 2009	May 2008	Change yr on yr (May 09 vs May 08)	April 2009	Change month on month (May 09 to Apr 09)
Avg purchase price	R 773,440	R 777,277	-0.5%	R 767,769	0.7%
Avg purchase price of  first time buyer	R 546,202	R 554,303	-1.5%	R 530,510	2.9%
Avg approved bond size	R 598,733	R 665,192	-9.9%	R 607,574	-1.4%
Avg deposit (as % of purchase price)	22.6% (R 174,707)	14.4% (R 112,085)	56.9%	20.9% (R160,195)	-8.1%
Avg age of applicant	36	38	2 years younger	37	1 year younger
Avg decline ratio	49.5%%	46.8%	2.7% increase	50.01%	0.5% decrease
Ratio of applications declined by one lender but approved by another	22.6%	39.5%	16.9% decrease	15.7%	6.9% increase

Over the last ten years ooba (formerly MortgageSA) has facilitated over R155 billion in home loans and placed well over 300 000 South African families into their new homes, leading the mortgage origination industry it pioneered in 1999.

"We are particularly proud of starting an industry that now facilitates over 70% of the country's new residential home loan applications and which has played a significant role in making home ownership more affordable for everyday South Africans," says Saul Geffen, chief executive of ooba.

Re-branded in February 2008, ooba is the biggest mortgage origination company in the country. In 2004 the company won the 'South African Top Non-Listed Company' award recognising the company for its business achievements, visionary strategy and sustainable growth.

Homebuyers use mortgage originators to shop around for the best home loan deals and secure quick approvals. Originators' service is at no cost to home buyers and without any obligation to accept a particular loan sourced.

Originators have been responsible for improving interest rate concessions for home buyers by more than one percent, with rate concessions of up to 2% possible at the peak of the market. Before mortgage origination, many buyers received no discount to prime. Over the life of any home loan, the savings for consumers are real and significant.

"We know that the last few years have been tough on homeowners, but we are confident that the property market will begin to stabilise and growth will turn positive by 2010. Our role is to continue to fight for credit approvals in this difficult environment and ensure consumers get the best deals available." says Geffen.

"It's particularly important that consumers seek the best advice in these times, as positioning the application for the greatest chance of approval is critical given the banks' current stance on lending"

Geffen also points out that in line with the company's consumer-centric vision, ooba has evolved its offering from sourcing the best deals on home loans, to providing a complete home-ownership solution including online property search, buildings and life insurance, and even a home improvement credit card that offers the best discounts on home-related products and services.

Geffen also acknowledges that the current market conditions are reshaping the origination landscape in South Africa but he remains bullish.

"We believe that the current market uncertainty will create opportunities for businesses which have invested appropriately to take advantage and capitalise for long term benefit."

Ten years of ooba innovation

Properties are languishing on the market as buyers remain cautious ¿ but there are things sellers can do to get the best possible price according to SA's largest mortgage originator.

Jenny Rushin, property finance manager at ooba, said home sellers have to be ultra savvy these days. Here are ooba's top tips to make your home as appealing as possible without breaking the bank.

1) Start with a great impression

Your front door is the first thing a buyer will notice. Make sure it's a smart, gentle colour and in good condition. If there is space, flower pots next to the front door make for an inviting entrance.

2) And follow it through to the entrance

Ensure your hallway says "welcome". It's a good idea to have a console table, a mirror, a lamp and a nice piece of art.

3) Light up, light up

Gloomy, dark houses are a big turn off. Make sure your house is as bright as it can be. Cut trees and bushes that may obstruct light from the outside and add new lamps inside if more light it needed.

4) Space man

Make sure your furniture fits the space. Buyers will think "small" if your furniture is oversized or battle to see what a space can be used for if it's empty. To make the best use of a space, select furniture that will fill gaps purposefully.

5) Atmosphere

Creating an atmosphere of elegance and sophistication and elegance makes buyers feel they are looking at something special. Ambient lighting, books, accessories, artwork and scented candles creates the right atmosphere.

6) Calm the colour

If you have very loud walls, think of repainting them: pale creams and greys and warm stone hues work well and create a neutral palette for the next owner.

7) Petal Power

Flowers are an easy and cheap way to freshen up a house. Placing a couple of vases of flowers around the home adds a real sense of style and will brighten any room.

8) Declutter, Declutter

Toys, laundry, old magazines and other items should all be tidied away. Clutter makes spaces look smaller - and a home messy and is a big buyer repellant.

9) Sparkling powder rooms

Tacky bathrooms make peoples' skin crawl. They can easily be spruced up with new mirror above the basin, fresh towels, and accessories such as hand soaps and creams. And make sure they are spotless on show day. Spotless.

ooba (formerly MortgageSA) welcomed today's interest rate cut of 1% announced today by the South African Reserve Bank.

The latest 1% cut in interest rates will save home owners an additional R710 a month on a R1m home loan over a 20 year period.

"The decision by the Reserve Bank to cut interest rates by one percent today is likely to be a key trigger for homebuyers," says Saul Geffen, chief executive of ooba (formerly MortgageSA).

The South African property market has experienced a marked slow-down from the beginning of 2008 due to a combination of factors including high interest rates, the introduction of the National Credit Act and tighter lending policies by the banks.

"We are hoping that banks will soon begin to relax their restrictive lending policies and this, coupled with home owners improved affordability, should begin to revive the property market," notes Geffen.

Recently ooba forecasted that the current low level of activity in the property market and negative property price growth with continue until mid 2009.

"However, the drastic interest rate cuts are expected to stimulate the property market in the short term and we expect to see house prices stabilise and move into positive territory by the first quarter of next year," concludes Geffen.

Savings

Bond amount: R350,000 R savings per month with 1% interest rate cut : R248

Bond amount : R500,000 R savings per month with 1% interest rate cut : R355

Bond amount : R1,000,000 R savings per month with 1% interest rate cut : R710

Selling your property, especially in the current property slump, may seem impossible, but property owners can increase their chances by avoiding common home selling mistakes says Jenny Rushin, Provincial Property Finance Manager for ooba (formerly MortgageSA).

Incorrect pricing

Attaching an incorrect price tag to your home is one of the biggest mistakes sellers make.

"Evaluating the price of your home, especially when housing prices are so volatile, is a very difficult job," warns Rushin. Now more so than ever it is critical to contact your local real estate agent who is the area specialist who will assist to accurately price your property

"Property growth has taken a knock in the past year and the housing marketing is not benefitting from enormous year-on-year increases seen in the past."

Inflated price will scare away any potential buyers especially in current conditions when bargains can be found.

"Just as you should be aware of over inflated prices, conversely a very low price is just as detrimental and a very real mistake of current home sellers," says Rushin. Some sellers are panicking and selling their properties for less than they are worth which affects the seller's personal wealth as well as their ability to purchase their next property."

Perform as much market research as possible on the area you live in before you decide on a price tag. Do property searchers for similar homes in your area, read up on the current property prices and take professional advice from real estate agents

You can also consult with a professional property evaluator who, although sometime pricy, will be able to give you the fairest pricing.

Incorrect marketing

There are many ways in which to market your home and obviously the more potential buyers have access to your home the more chance there is of a sell. Sellers often don't exhaust marketing opportunities when trying to sell their homes.

"The traditional property mediums, such as the property pages, are not the only way to market your home," notes Rushin. "In fact, there appears to be a trend away from the property pages to online property pages, as online property pages are simple to use and very accessible.

To maximise your online presence make sure that there is as much information about your home available as possible as well as good quality pictures.

"Take an interest in the marketing of your home and if you are dealing with a real estate agent ask where they will be advertising your property," says Rushin. "It should cover both the traditional print property pages as well as an online website."

Bad first impressions

It is not only up to the estate agent to sell your home, it is your job as well. According to a survey conducting by propertygenie.co.za almost half of all buyers knew whether they will buy a home the moment that they stepped into it.

Help the process along by presenting a tidy home free from overwhelming odours such as cigarette smoke and pet smells.

"Don't assume that buyers are only looking at the structure of your home, they are looking for a lifestyle," says Rushin. "A neat, presentable house will sell much quicker than an untidy home."

Property is traditionally an emotional asset as many people not only have a lot of their money invested in their property but also have many memories.

"Before you even begin the process of selling your home you need to separate fact from fantasy," states Rushin.

"Examine the reasons why you want to sell the house that you are currently residing in," concludes Rushin. "If you are not sure and there is no immediate reason to sell I suggest waiting until you are 100% comfortable."

Aside from the countless hours of hassle dealing with paper work South African mortgage originators have saved home buyers an estimated R7.35bn a year in interest charges through the negotiation of lower financing costs.

"Well over 70% of all new home loans are facilitated via originators, who shop around to find the best rates and secure the approval on the home loan, all at no cost to the consumer," says Rhys Dyer, chief operating officer of ooba (formerly MortgageSA), the country's leading bond originator that has placed over 305 000 people in their homes with over R152bn in mortgages.

Before origination, many buyers received little or no discount to prime and accessed their finance through approaching only a single bank. Originators have been responsible for improving interest rate concessions across all home buyer consumers (including first-time buyers), with rate concessions of up to 2% being routinely achieved at the peak of the market.

For every 0.5% additional concession to prime, the saving on an average size home loan of R1 million represents an interest saving of R86 750 over the life of the standard 20 year bond.

"This shows that it really pays consumers to not just accept the first rate offered to them but to shop around. It's easiest to do this with the help of an originator," says Dyer.

"The origination value proposition is even stronger in the current market, given the global credit crisis," notes Dyer. "The banks have imposed tighter lending criteria and the consumer's ability to access finance has been affected."

Originators approach multiple lenders on behalf of the consumer and the benefit of having one's home loan application assessed by more than one bank, gives the consumer the best chance of obtaining finance and a better deal.

Origination also remains the key distribution strategy for the banks. Dyer notes: "Mortgage origination is a pure outsourcing model for the banks. Origination is a more cost effective alternative for the banks to them having to employ their own sales and distribution staff."

Since 2008 the property market has experienced a slow down due to a combination of factors which include the high price of debt, the introduction of the National Credit Act and banks tightening up their lending policies. This has been exacerbated by the sub-prime crisis, the global liquidity crisis that followed this and the current global economic slow down.

"South African property owners have been hit hard by the recent slow-down in the industry," says Dyer. "The very restrictive lending policies of the banks have compounded the troubles in the housing market."

Consumers are sometimes under the impression that by cutting out originators they themselves will benefit from further discounts but this is not the case as Dyer points out.

"Firstly, originators such as ooba are able to give consumers the advantage of having the banks compete for every loan application, thus ensuring the best deal for consumers, secondly the costs of distribution currently borne by originators would have to be replicated by banks" Dyer points out.

There is hope on the horizon. Interest rates are already 2.5% off their peak of 2008 and further interest rate cuts are expected well into 2009. With improved affordability for consumers, the property market is expected to start recovering by the end of the year.

"The current downward interest rate cycle is a great relief to all South African home owners," says Dyer. "The latest cut by the Reserve Bank on 24th March of 1% will save home owners an additional R730 a month on a R1m homeloan over a 20 year period."

Each day another headline tells us just how bad the property market is, but loads of savvy investors are piling in and picking up bargains in this period of weakness. So how do you find a property bargain?

Ben Seymour-Brown, manager of group direct sales for ooba (formerly MortgageSA) says that ooba advises home hunters to follow these five tips:

1) Learn to negotiate

For those wanting to hunt down a bargain, a buyers market holds plenty of opportunities especially if you're prepared to haggle on price. Estate agents will always try and get the best price they can for a property, but their businesses rely on transactions and they will be eager to shift homes that have been sitting on the books. Sales volumes have dried up dramatically so they will be very eager to notch up a sale.

2) Check for reductions

Thanks to the internet and websites like propertygenie.co.za it has been possible to see what comparable properties are selling for and get a good idea of what's on offer.

It is also possible to see properties that have had their prices reduced, by saving them in property search engines, or using the website, which shows properties that have had reductions. Anyone interested in a certain area nearby should also keep a close eye on estate agent windows.

If you are serious about buying, use your knowledge of any reductions and how long a property has been on the market to try and negotiate down the price.

3) Register with reputable agents

If you are looking for a bargain, register as a buyer with several good agents in your target area. Tell them what you¿re looking for and what your price range is and they ring you as soon as they have a matching property on their books. They'll also let you know about price reductions.

Bargains don't last long so you'll have to move quickly.

4) Get pre-qualified

Closely related to the above, when a bargain comes up you'll need to know if you can afford it. If you let a reputable bond originator like ooba do all the homeloan hunting for you, you'll be sure to get the best rate and know in advance how much you can spend- all at no cost to you.

Sellers are also much more comfortable dealing with someone who already has finance in place and will likely give your offer greater weight than someone who has yet to secure finance.

5) Do your homework

You won't know a bargain unless you know what prices are in the area you're targeting. There are many websites like South African Property Transfer Guide that for a small fee will show you the actual selling prices of properties. These are often quite far removed from what the asking prices are. Be informed of what the recent selling price trends are so you can grab a bargain when one come up.

According to South Africa's biggest mortgage originator, the transfer duty threshold should be bumped up to R1m rand in this year's budget to make home buying easier for thousands of South Africans that have effectively been shut out of the market because of banks' stringent lending criteria.

The current threshold for transfer duty is R500 000.

Speaking ahead of this year's budget announcement, Saul Geffen, chief executive of ooba, (formerly MortgageSA) said that people wanting to buy a home while the market is soft are facing tough times.

Geffen notes that banks' recent tightening up of lending has compounded the troubles in the housing market. "Banks have introduced much stricter lending criteria and fewer buyers are qualifying for the full amount of the loan they apply for."

When banks do grant loans, they are demanding deposits of up to 30% depending on the size of loan. On top of the deposit, buyers must then pay transfer duty (a tax) which means buyers need to have a lot of cash on hand.

"Lowering the transfer duty threshold would make it easier for consumers, particularly first-time buyers, to enter the property market."

Geffen noted that Finance Minister Trevor Manual increased the threshold at which transfer duty on fixed property becomes payable from R190 000 to R500 000 in 2006 but that three years on, it needed to be raised again.

"In early 2006, the average property price in South Africa was around R700 000. Now it is just shy of R1m so the threshold also needs to recognize this bracket creep effect and ease the tax burden on South Africans at a time they need it most."

Currently, there is no transfer duty payable on property purchases under R500 000 while 5% transfer duty is payable of the value above R500 000. The duty on transactions above R1m is R25 000 plus 8% of the value above R1m.

Geffen also said that he expected a lot more buyers to come into the market in 2009, especially later this year, as interest rates continued to drop. He also noted that lower inflation would have a positive impact on people's wallets.

"It looks as if 2010 will be a far better year for South African property."

The January oobarometer price index shows a decrease in the average house price growth by 4.8%.

"The oobarometer shows that the property market is continuing its negative trajectory," says Saul Geffen, chief executive of ooba (formerly MortgageSA).

The average purchase price was at R818, 905 in January 2008 compared to R779, 033 in January of this year.

The oobarometer is expected to continue to record declines in house prices until the second half of 2009. Thereafter the property market is expected to start to make a recovery and begin to show positive growth at the end of 2009 into 2010.

"Interest rates are expected to continue to be cut throughout the first half of 2009 which will give home owners much needed relief and stimulate the property market," says Geffen.

"The stringent changes to lending criteria implemented by banks at the end of last year have had an immediate effect on the average decline ratios," says Geffen.

The year-on-year average decline ratio has increased by 15.3% while the month-on-month data reflects a 0.8% increase. This means that, in January 2009, 58% of all home loans submitted were declined by the first bank their application was submitted to.

The ratio of applications declined by one lender but approved by another also showed a strong downward trend in January of this year to 22% from 38% in January 2008. This means that only 22% of loans declined by one lender were taken up by another in January.

"The sharp decrease in the ratio of applications declined by one lender but approved by another indicates that there is a reduced opportunity to obtain approval once one bank declines an application," states Geffen. ¿This is due to the restrictive lending criteria the banks have imposed recently."

There has been a 22% increase in the year-on-year average deposit as percentage of purchase price which is indirectly linked to the change in bank lending policies.

The average bond size has drop by 8.4% from R700, 042 in January 2008 to R641, 140 in January 2009. There was a 2.8% drop in month-on-month average bond size.

Geffen notes that banks' recent tightening up of lending has compounded the troubles in the housing market.

"Banks have introduced much stricter lending criteria and fewer buyers are qualifying for the full amount of the loan they apply for. With interest rates coming down, the recovery of the property market is shifting towards bank lending policies. Banks will need to relax lending in order to facilitate increased demand and prevent further price deflation" concludes Geffen.

Full oobarometer analysis:

Indicator	January 2009	January 2008	Change yr on yr (Jan 09 vs Jan 08)	December 2008	Change month on month (Dec 08 to Jan 09)
Avg purchase price	R 779,033	R 818,905	-4.8%	R 851,660	-8.5%
Avg purchase price of  first time buyer	R 561,948	R 554,843	1.3%	R 576,286	-2.5%
Avg approved bond size	R 641,140	R 700,042	-8.4%	R 659,354	-2.8%
Avg deposit (as % of purchase price)	17.7% (R 137,893)	14.5% (R 118,863)	22.0%	22.5% (R 192,306)	-21.3%
Avg age of applicant	38	37	1 Year Older	38	No change
Avg decline ratio	58.0%	42.7%	15.3% increase	57.2%	0.8% increase
Ratio of applications declined by one lender but approved by another	22.0%	38.4%	-16.4% decrease	27.4%	-5.4% decrease

ooba (formerly MortgageSA) welcomed the second interest rate cut of 1% in the current interest rate cycle announced today by the South African Reserve Bank.

The latest 1% cut in interest rates will save home owners R730 a month on a R1m homeloan over a 20 year period.

The 0.5% rate cut in December has already saved South African home owners an estimated R259m in home loan repayments each month and the latest rate cut brings that figure to an estimated R770m monthly savings.

"The decision by the Reserve Bank to cut interest rates by a further 1% is a welcome relief for all of South Africa¿s property owners," says Saul Geffen, chief executive of ooba (formerly MortgageSA).

The South African property market has experienced a marked slow-down from the beginning of 2008 due to a combination of factors including high interest rates, the introduction of the National Credit Act and tighter lending policies by the banks.

The decrease in interest rates as well as the lower petrol price should give consumers something to smile about.

The high cost of debt has been blamed for many home owners defaulting on their bond payments and for some; losing their homes entirely.

Geffen notes that banks' recent tightening up of lending has compounded the troubles in the housing market.

"We are hoping that banks will begin to relax their lending policies and this, coupled with home owners' ability to afford more, should begin to revive the property market," notes Geffen.

ooba recently found that home owners have been opting to keep their mortgage rates at the old level which means that they are paying off their home loans quicker and saving themselves thousands of rands in interest.

"This shows that home owners are becoming more financially savvy when it comes to their money and bonds," says Geffen.

While further rate cuts are needed to make a substantial difference in property owner's repayments it does signify a downward trend that will hopefully continue far into 2009.

Savings

South Africa's largest bond originator calls for a full 1% interest rate cut at February's Monetary Policy Meeting (MPC) saying that the time is right for bolder measures.

"Property owners won't benefit from half measures this time," said Saul Geffen, chief executive of ooba, (formerly MortgageSA). "While ooba and South African consumers welcomed the half percent rate cut in December, further rate cuts are necessary in order to relieve homeowners and stimulate the stalling property market."

Geffen points to the dramatic rate cuts around the world to stem the sharp economic slowdown that is also already in evidence in South Africa.

"Several economists have in the last few weeks slashed their growth forecasts to less than 1% for 2009."

A rate cut of 1% will assist overburdened consumers who have been struggling with the high price of debt as well as kick start the stricken property market and restore consumer confidence.

Geffen notes that banks' recent tightening up of lending has compounded the troubles in the housing market.

"Banks have introduced much stricter lending criteria and fewer buyers are qualifying for the full amount of the loan they apply for.

"With interest rates coming down, the recovery of the property market is shifting towards bank lending policies. Banks will need to relax lending in order to facilitate increased demand and prevent further price deflation."

Thousands of homeowners are overpaying on their homeloans in an effort to reduce their debt ¿ and many more are expected to keep their monthly repayments up even though they have started to decline with lower interest rates.

Kay Geldenhuys, Manager of Property Financing and Insurance Processing at ooba (formerly MortgageSA), says that clearing homeloan debt is currently a popular strategy again amongst homeowners.

"Lot's of South African homeowners are worried about uncertain economic backdrop, nervous about the stock market and just having too much debt so they are dumping excess cash into their bonds.

"We've also seen that many homeowners have asked their banks to keep their monthly repayments at the levels they were before the rate cut to pay off their homeloans quicker.

"It's a good strategy because many people have got used to paying more and want to keep repayments the same throughout, what is expected to be, a year of rate cuts."

The saving effects from keeping repayments the same are dramatic.

For example, the monthly repayments on a 20 year, 1% below prime, R1m homeloan was R12 800 a month at 14.50%. After the rate cut of 0.5% in December 2008, the monthly repayments are now R12 440, a fall of R360.

"You can ask your bank to keep your repayments at the old level which means you'll be overpaying by R360 a month and saving over R300 000 in interest over the life of the loan.

"You'll also reduce your repayment period by over 2.5 years," notes Geldenhuys.

If rates drop another 2% this year on top of the 0.5% in December, monthly repayments will fall to R11 010 a month, or R1790 a month less.

If a homeowner keeps his repayments at the level of R12 800, the amount before the rate cuts started, he'll save a whopping R687 696 in interest and reduce his homeloan term by over 7 years.

Geldenhuys points out that as interest rates drop this year, the benefits of sitting on cash diminish because interest earned on that money is less.

"Overseas it has become one of the most popular investment strategies right now as money in bank accounts is earning almost no interest. While we don't expect rates to fall as dramatically as they have in say the UK or the US, we still see them falling.

"This will further underpin the case for investing in your bond as returns on cash deposits fall."

Geldenhuys also said that with stock markets the world over under pressure, investors are looking for certainty.

"If your homeloan rate is at 14%, putting money into the homeloan means you are getting a certain return of 14%. And that¿s a really good return in any economic climate."

ooba (formerly MortgageSA) welcomed the 0.5% interest rate cut announced yesterday by the South African Reserve Bank which will save South African home owners an estimated R259m in home loan repayments each month, but says more cuts are needed.

"The decision by the Reserve Bank to cut interest rates by 0.5% is a relief to all property owners but further cuts are necessary in order to revive the ailing property market," says Saul Geffen, chief executive of ooba (formerly MortgageSA).

Interest rates have been increased by 5% since June 2006 which means that an average bond at prime of R1 million is R3 560 more expensive to pay off each month.

The high price of debt is one of the major causes of property owners defaulting on their bond repayments.

"Property is fundamental to wealth creation and is many South African¿s primary investment," states Geffen. "This cut will provide much needed relief to homeowners struggling with debt repayments and hopefully we will now see a decline in the numbers of defaults."

The decrease in the price of debt coupled with the recent cuts in petrol price will bring a welcome respite to all consumers who have been struggling with the high cost of living.

While the rate cut may not make a substantial difference in property owner's repayments it will go a long way to restore consumer confidence and kick-start the property industry.

"This move signals the beginning of a downward trend in rates and will go a long way to restoring positive sentiment .We can look forward to further interest rate cuts in 2009," says Geffen.

Savings

The oobarometer indicated an increase in average purchase prices of 10.2% from October to November.

"It appears that the increase in house prices from October to November may be attributed to a shift to higher priced properties in November given affluent buyers' ability to adapt to stricter lending practices," says Saul Geffen, chief executive of ooba (formerly MortgageSA).

House prices were R827 463 in November compared to R751,118 in October.

Average deposits continue to show substantial year-on-year increases with a 31.5% rise in the average deposit as a percentage of purchase price from November 2007.

"The increase in average deposits is a function of the significant change in the bank's deposit requirements given the tighter lending landscape and high levels of defaults," notes Geffen.

The average purchase price for first time buyers increased marginally by 0.5% from October to November but dropped slightly by 0.6% from R 566,702 in November 2007 to R 563,354 in November 2008.

The average age of first time buyers has changed for the first time since the oobarometer was launched now reflecting they are one year older, at an average age of 38, when making their first home purchase.

While first time buyers are feeling the pinch and have been adversely affected by the economic conditions Geffen suggests that potential buyers should recognise that there are also positive spin-offs from these conditions, specifically for those wanting to get on the property ladder.

"Buyers should use the faltering property market to their advantage and should try negotiate a deep discount to the asking price when it comes to buying a first property," notes Geffen.

The month-on-month average bank decline ratio, which is the average percentage of all home loan applications initially rejected, has increased to 51.8%; a 1.6% rise from October.

"The increase in the average bank decline ratio reflects the banks continuing tightening of lending criteria," says Geffen. "Banks have been hit hard by high interest rates and defaulting home owners, and they have imposed much stricter lending measures.

"It is definitely much harder for buyers to get home loan approval as banks now require increased deposits and are very cautious in regard to new lending. However, the major banks have widely variant approaches to individual customers, both in regard to securing approvals and interest rates concessions, so make sure you shop around", concludes Geffen.

Full oobarometer analysis:

Indicator	November 2008	November 2007	Change yr on yr (Nov 08 vs Nov 07)	October 2008	Change month on month (Oct 08 to Nov 08)
Avg purchase price	R 827,463	R 827,565	-0.01%	R 751,118	10.2%
Avg purchase price of  first time buyer	R 563,354	R 566,702	-0.6%	R 560,623	0.5%
Avg approved bond size	R 665,212	R 703,580	-5.5%	R 602,903	10.3%%
Avg deposit (as % of purchase price)	19.6% (R 162,251)	14.9% (R 123,985)	31.5%	19.7% (R 148,215)	-0.5%
Avg age of applicant	38	37	1 Year Older	37	1 Year Older
Avg decline ratio	51.2%	43.4%	7.8% increase	49.6%	1.6% increase
Ratio of applications declined by one lender but approved by another	30.8%	38.4%	7.6% decrease	32.0%	-1.2% decrease

South Africans spent over R10 billion during the festive season last year. This year ooba suggests carefully planning your holiday season spending to avoid a financial hangover in January 2009.

"Festive season debt can take months to pay off in the new year," says Jenny Rushin, Provincial Sales Manager for ooba (formerly MortgageSA). "We suggest planning your holiday this year carefully to minimise the financial impact but still have an enjoyable holiday season."

Consumer spending over the holiday season represents more than 20% of retailers' annual sales.

"Retailers depend on the holiday season for sales and encourage consumers to spend money they don¿t have," warns Rushin.

Rushin proposes a few money saving tips this holiday season.

First and foremost give yourself a gift and pay off your bond.

"People often make the mistake of depending on their 13th cheque to finance their holiday or pay-off post-holiday debt," says Rushin. "Especially in a year where money is tighter."

But, the old advice of putting at least some of it away into your bond still applies.

"A R20,000 lump sum deposited into a million rand bond will save you R264 245 in interest over the loan period assuming that your interest rate is 1.5% below today's 15.5% prime interest rate," says Rushin. "This means you will save more than 13 times the original amount as well as cutting your repayments to 18.1 years on a 20 year bond.

"If you haven¿t booked your Christmas holiday, flight or car hire, by now, seriously consider staying at home this year and put money aside for a longer trip next year." suggests Rushin.

Flights, car hire and accommodation are exponentially hiked up over the holiday season and last minute bookings can cost more than one and a half times the original price.

"Never use your budget facility on your credit card, especially to pay for goods such as food," warns Rushin. "Although the minimum monthly repayments may be lower than on straight, the interest rate is far higher and you do not have the option to pay it off quicker, so are stuck with the debt for at least 6 months."

Rushin says, "Rather than planning a financial budget in the New Year, when the damage is already done, plan a budget now which will result in sensible spending over the holiday period." Try and list what your biggest expenses will be such as gifts, food, travel and any other potential expenses. While you may go over your budget, the act of planning creates awareness and you are less likely to overspend.

Another money saving technique is to start buying presents now, rather than a few days before Christmas where the urge to grab anything off the shelf usually results in expensive and thoughtless gifts.

But Mary Jane Lefevre, Regional Sales Manager of ooba, said that before you apply for a home loan, there are steps you can take to improve your credit status and encourage lenders to look more favourably on your application.

"Even those who know that they have a good credit history should request a copy of their credit record from ITC and Experian (contact details for these can be found on the web) to ensure that all information held on you is both accurate and up to date," says Lefevre. "You can also approach an origination company such as ooba who will, with your written consent, provide you with your credit records."

Be aware that each time your credit record is accessed; it affects your overall credit score at the bank. Therefore don¿t allow everyone and anyone to access your credit record.

1. Sever old relationships

When you apply for credit, it isn't just your details the potential lender will scour. They will also check the credit history of your spouse (if you are married in Community of Property) or any co applicant or surety you may apply with. Joint bank accounts, if not conducted correctly could have an adverse affect on your application and if you are divorced or separated, make sure you are not linked to any debt or open credit facility with your ex.

2. Cancel out of date credit cards

Many people switch credit cards frequently but fail to cancel old agreements even if they no longer use the credit or retail card. But ooba warns that these lines of credit will still appear on your file, which can make lenders wary about the potential size of your total debt ¿ some may fear that you will "max out" these cards and then struggle to meet repayments.

If you don't need the full credit limit given on a card, ask your lender to reduce it. The same applies to retail credit.

3. Build a track record

Banks want to see that you have a record of managing credit sensibly. So if you are a first-time buyer consider taking out a credit card six months before making your bond application. Of course, you'll need to make sure that you pay off the balance in full each month, and on time, to avoid interest payments and to show that you are diligent with managing your debt. Also, make sure your income is deposited monthly into a bank account as the banks will ask for proof of income via your bank statements.

4. Ensure details are the truth

Make sure that information you provide on applications is accurate and truthful. Inconsistencies can have a negative effect on your credit score and you must be able to prove any income that you have declared.

5. Include additional information

Where necessary, add further information about previous credit problems. If such problems were after redundancy or divorce, for example, and your financial situation has since improved, you can add a note explaining this. Likewise, if you have been a victim of identity fraud in the past, make sure that any credit problems caused by this are removed from your file. Always keep proof of paying up any arrear debt and rescind judgments. Companies such as ooba can help through services such as oobaassist, which will assist you through the process of clearing any negative credit records.

6. Before you put in an offer, get pre-qualified

Even if you only plan to buy a property in six months time, start talking to a reputable bond originator who is able to help you with any potential problem as well as prequalifying you on income less expenses and deductions. A reputable bond originator will also have solutions to any potential problems facing you in a tougher credit environment.

The global stock market meltdown and worldwide banking failures are likely to spur renewed interest in the safety of bricks and mortar.

Saul Geffen, chief executive of ooba (formerly MortgageSA), said today that recent events are likely to lead investors to re-look at property as a safe haven investment after losing confidence in shares and banks.

"The property market is compelling right now as investors will feel more secure having their money in a tangible asset with underlying inherent value in the land, and which they control directly," says Geffen.

House prices in South Africa have been relatively flat and in some cases fallen in the past year. Rental yields have risen from greater demand for rental property as buyers have been unable to raise finance.

Geffen said that the stock market meltdowns are likely to underpin the case for property as investors are comparing it to riskier paper investments.

"Cash buyers will be in a particularly strong position to snap up properties because of the bargaining power cash has. But other investors will also seek the relative safety of property investment."

Geffen noted that this trend will initially be led by existing investors who have the experience to cope with the current market conditions.

"With property, you can feel it, touch it and see it and you know it cannot be taken from you. With a worldwide recession looming, equity markets are unlikely to perform for the next few years so investors will inevitably be switching some money from equities into property", says Geffen.

The latest 'oobarometer' price index showed that average house prices have risen 3.4% in the month of September 2008, year on year.

The oobarometer also found that the average purchase price in September jumped 2.4% from August 2008 bringing the price rise since July 2008 to 1.6%.

Interest rates have gone up from 10.5% to 15.5% since June 2006 which means that home owners are paying an additional R3 555 on an R1m bond size. This coupled with huge increases in the petrol price and high inflation rates are squeezing disposable income making the average property owner more susceptible to defaulting.

Despite the tough market conditions, property is still seen as one of the best long-term investments and home owners should be doing everything in their power not to default on their monthly bond repayments.

"Home owners are having a rough time keeping up with bond repayments in the current economic slowdown," says Mary-Jane Lefevre, regional property finance manager at ooba (formerly MortgageSA).

The good news is that the market is set to recover in late 2009 with interest rates predicted to drop and the housing market is expected to pick-up. Until then, here are a few tips to keep your head above water and repay your bond each month.

Prioritise your spending

Your car is not as important as your house.

"Unless it is a campervan and you are prepared to move into it permanently, consider buying a smaller, second-hand car," says Lefevre.

This will not only save on repayments and insurance on a cheaper car, but will also save on petrol costs.

"Carefully assess your expenditure, do away with luxury expenses and retain only essential expenditure. When things improve you can always reinstate those luxuries".

Don't hide in the sand

By facing your potential financial difficulties head-on you are more likely to be pro-active and make a plan before you have missed a bond repayment.

"You may now be really starting to feel the pinch and your next bond repayment could be under threat of non payment. You need to talk to your bank straight away, don't delay this discussion" says Lefevre.

Speak to your bank

"Your lender doesn¿t want your house, they want you to maintain your bond instalments," states Lefevre. "They are open to negotiation and should be contacted as soon as you spot potential trouble on the horizon.

"Banks are open to discussing your bond repayments; however they will want to see a commitment from you to reduce expenditure, particularly luxury expenditure, before they agree on amended repayment figures. Do not expect the bank to reduce instalments, if you are not prepared to reduce non essential expenditure," says Lefevre.

Get financial advice

The cost of a professional financial advisor may end up saving your home. They will be able to objectively look at your finances and suggest alternative ways of saving money.

"Your home is one of your most important assets," concludes Lefevre. "So make a plan to keep up with your repayments during these more difficult times in the short term, and you will be rewarded in the longer-term when the economic conditions improve. Remember you can always get back your luxury items but if your home is repossessed you will find it very difficult to get back into the property market."

The oobarometer also found that the average purchase price in September jumped 2.4% from August 2008 bringing the price rise since July 2008 to 1.6%.

The oobarometer recorded price declines in both July and August. September is the first price rise. With residential property sales down around 50% year on year, it is too early to say if this marginal growth in average house prices suggests prices will start rising. It is anticipated that the index will show low or negative growth in future months. With the significantly reduced transaction volumes in the residential market, the transactions mix may also be influencing the price data and increasing volatility.

Saul Geffen, chief executive of ooba, said that the average purchase price in September this year was R794 977, compared to R768 557 in the same month last year, a rise of 3.4%.

According to the oobarometer, the average price paid by first time buyers was R551 934 last month compared to R540 736 in September 2007, a rise of 2% on the prior year, and an increase of 12.6% on August 2008. This could indicate greater confidence as first time buyer's returning to the market as rates are expected to remain flat and start decreasing early next year.

The average decline ratio, which is the average percentage of all home loans applications initially rejected by banks, remained high at 51% in September, up 10.4 % on the prior year.

Geffen says that, "the higher decline ratio reflects the impact of the National Credit Act on curbing the extension of credit. Under the new legislation, banks' credit decisions have shifted to determining affordability based on net disposable income. Given the high levels of indebtedness, consumers have been hit hard with higher interest rates and the decline ratio has shot up."

"However the NCA has been positive for SA as it has lessened the possible impact of the subprime crisis within SA."

"The international credit crisis has not helped either, with banks' access to capital constrained."

Of applications declined by one lender, 32% were approved by another lender ooba submitted the application to. This percentage is up on the 30% recorded in August.

The average deposit on a property has remained relatively static at around 18.6% in the past month but is about 58% higher than a year ago.

Full oobarometer analysi:

Indicator	September 2008	September 2007	Change yr on yr (Sept 08 vs Sept 07)	August 2008	Change month on month (Augl 08 to Sept 08)
Avg purchase price	R 794,977	R 768,557	-3.4%	R 776,048	2.4%
Avg purchase price of  first time buyer	R 551,934	R 540,736	2.0%	R 489,828	12.6%
Avg approved bond size	R 629,589	R 698,027	-9.8%	R 636,201	-1.0%%
Avg deposit (as % of purchase price)	18.6% (R 148,579)	12.2% (R 93,817)	58.3%	18,8% (R 146,177)	1.6%
Avg age of applicant	37	39	2 years younger	37	No Change
Avg decline ratio	51.0%	40.6%	10.4% increase	49.8%	1.2% increase
Ratio of applications declined by one lender but approved by another	32.4%	41.8%	-9.4% decrease	30.2%	2.2% increase

ooba, South Africa's largest bond originator, has launched a free service to help counter the growing problem of failed property sales from buyers unable to secure enough financing.

Jenny Rushin, provincial sales manager at ooba (formerly MortgageSA), said: "We have seen a number of offers to purchase falling through of late because potential buyers are not able to get the finance they need after they have had their offers accepted.

"This is because they don't fully understand how to work out the size of the homeloan they qualify for and is also due to the fact that banks have tightened up on their lending criteria.

"It's hugely disappointing for buyers and sellers alike."

To make things easier for buyers, ooba has launched oobaqualified ¿ a free service that tells buyers just how much they can spend on a home before they go to the time and effort of looking for a home a making an offer.

"All buyers have to do is provide their income and expenditure details and within hours they will get a certificate guaranteeing a homeloan for an approved amount," said Rushin.

Rushin notes that buyers who are pre-qualified are in a much stronger position to negotiate with sellers.

"Because they already have finance, sellers feel confident that the offer will fly and may favour them over those who aren't pre-qualified."

In an effort to help consumers out of their debt traps, ooba, SA's largest bond originator, has recently launched oobaassist, a service that helps their clients clear their bad debt records, allowing them to apply for a bond and purchase a home.

"Things are tough out there and a lot of people really need help," said Kay Geldenhuys, Property Finance Manager at ooba (formerly MortgageSA).

"We have introduced oobaassist because we realised that it was necessary to assist our customers who have had their bond applications rejected because of bad debts because they simply didn't know where to start.

"But people with bad debt need to understand that it is not a life sentence. With a service such as oobaassist it is possible for them to own that dream home."

The oobaassist service includes free consultation and financial advice from ooba and also negotiation with creditors to clear peoples' bad debt record at a 25% discount to normal legal fees.

"oobaassist also advises on the best way to pay off bad debts and even negotiates with debtors for the best repayment options."

According to ooba's data, 11% of bond applications are being rejected by all banks because of bad debt records - up 8% from 2 years ago.

"People applying for bonds with bad debt records are faced with a nasty shock when no bank in South Africa is willing to risk granting them a bond leaving them with seemingly very few options," noted Geldenhuys.

"Even if you have managed to climb out of the debt hole and pay back monies owed, without the correct processes of completely clearing your credit record, the bank still views you as a risk.

"And any type of debt can be harmful such as defaulting on municipal rates, credit cards, retail accounts and motor vehicle repayments - banks have access to all of these records which means bad debt can't be hidden," Geldenhuys concluded.

ooba, (formerly MortgageSA), SA's largest bond originator, says that first time property buyers are feeling the pressures of higher interest rates and have adapted their buying behaviour.

Saul Geffen, chief executive of ooba, said that according to ooba's data, the average price of a property bought by first time buyers has fallen from R548 800 in June 2007 to R521 600 in June 2007.

"That's a decline of 4.9% in the past year in the average price paid by first time buyers. Most of that decline has occurred in the past month with prices dropping from R542 400 in May 2008 to June's R521 600, a decline of 3.8%."

According to ooba's data, the average price of all property purchased, which includes first time buyers, has dropped from R807 000 in June 2007 to R793 600 in June 2008, a fall of 1.7%.

"Affordability right now is a major issue with bond repayments up nearly 40% in the past 2 years. Loans are also more expensive, with the average interest rate concession to prime falling from 1.31% to 1.25% in the past year."

In June 2008, ooba's interest rate concessions achieved for the top 10% of applicants with the best risk profiles was between 1.85% to 2.45% below prime.

ooba's statistics also show that 50.1% of all home loan applications were rejected by the banks in June 2008, up from 40.3% of applications in June 2007.

Said Geffen: "However, when an application is rejected by one bank it is often approved by another. ooba's stats show that more than a third of all the home loan applications declined by one bank in June 2008 are approved by the other banks it sends the application to."

Geffen notes that ooba experiences large variances in the interest rate concessions given between the banks, even on the same home loan application.

"Just a 0.5% difference is significant, and getting the wrong rate can mean adding a huge amount to the total cost of the loan and your monthly repayments.

"Buyers and especially first time buyers must shop around and secure home loan approval at the best interest rate," said Geffen.

"It's much easier with a reputable bond originator on your side."

Banks have also made things tougher for buyers by tightening their lending criteria. Currently only FNB and Nedbank are still granting some 100% loans with other banks requiring deposits of between 10 and 20%.

ooba, formerly MortgageSA, has entered the aggregation sector of the bond origination market through the launch of its new aggregation business under the brand "Evo". Bond aggregation is the business of facilitating access to bank contracts and systems for bond originators trading under their own brands enabling them to originate bonds directly on behalf of homebuyers.

Evo, a 100% subsidiary of ooba, is a business to business offering targeting a large slice of the lucrative South African bond aggregation market. Evo will establish business partnerships with new and existing bond aggregators to facilitate access to banking relationships and systems. Evo's favourable positioning and support services place it in a position to enable bond aggregators to compete more effectively in the marketplace and grow their businesses under their own brand names and business methodologies.

The bond aggregation market is well established in South Africa. Bond aggregators account for in excess of R5 billion in monthly new homeloan grants.

Saul Geffen, chief executive of ooba, said that ooba has deliberately not participated in the bond aggregation market to date as it has chosen to focus on growing its own financial services business, but that it is firmly committed to building Evo into a serious and competitive alternative in this market.

"We have been planning the launch of Evo for some time and we¿ve built a compelling offering backed up by leading systems, support services and products which we believe will resonate with all bond aggregators in the marketplace", says Geffen.

The Evo name was created to epitomise the business' philosophy of innovation and the supportive business approach to partners in evolving their businesses.

The launch of Evo follows ooba's acquisition, completed earlier this year, of the country¿s fourth largest bond originator, owner of the Wizard and Quantro origination brands.

Recent alarmist forecasts by property market commentators, many of which are unsubstantiated by facts, have caused homeowners undue concern according to SA's largest bond originator.

Saul Geffen, chief executive of ooba (formerly MortgageSA) said that he disagrees strongly with suggestions that prices have already dropped by as much as 15% and that further dramatic falls lie ahead.

"ooba's national stats show a 4% decrease in average bond value for May 2008 against May 2007. However, May 2008 was the first monthly drop in ooba¿s average bond size since April 2007. This is a result of a combination of negative pricing pressure and greater deposits being required."

ooba's average bond size for the 12 month period to April 08 is still up 7% over the same period to April 07.

Absa's latest house prices index shows 4.3% growth for May, while Standard Bank's price on medium sized homes shows a 13.2% decline for May.

Geffen also refuted claims that the reason that some banks now want deposits up to 25% on higher priced new home lending is because they expect the property market to fall a further 25%.

'It is true that the banks have constrained lending on high value loans. Lending criteria vary widely between different banks; typically loans up to R2.7m now require deposits of 5%, between R2.7 and R4m, a deposit of 10%, and greater than R4m, 15% to 20%.'

It's only on vacant land loans that some banks are requiring 25% deposits. The banks do still offer 100% loans to first time buyers and the affordable housing market.

'But a key reason why the banks have required greater deposits is to create a buffer for additional interest rate increases. This buffer improves the security and creates flexibility to the extent that they need to restructure the loan in the event of default.

"The banks may be concerned that the top end may come off more than the middle and lower end; however the required deposits should not be linked to expectations for similar declines in the value of the properties."

Geffen points out that the major banks are still offering 100% homeloans, particularly for first time buyers and affordable housing. Some have capped 100% loans for bonds up to R1m, but others are more flexible.

Geffen advises homeowners not to get swept away by the scaremongering headlines and to remember that current weakness is a short term situation.

"There is the potential for further price decreases but it is unlikely to be as much as 25% or 40%.

"The market is expected to recover as soon as the interest rates drop and that should be towards the end of 2009 with strong house price growth expected for the next 3 to 4 years thereafter."

Geffen notes that in the short term, he expects negative real house price growth to continue as all three key measures of affordability have shown deterioration: household debt to disposable income; mortgage instalments to disposable income; and house prices to disposable income.

"For the property market to recover, inflation must moderate, interest rates must fall, personal income must grow and house prices must continue to exhibit low growth so that housing affordability improves and drives housing demand.

Geffen also said that first time buyers and those looking to invest further in property were being presented with a 'buying opportunity'.

"However there is a lot of variation in lending criteria at the moment ¿ if one bank turns down an application, there is a good chance the other banks may grant finance. So make sure you shop around."

ooba's stats show that 40% of all the home loan applications declined by one bank are approved by the other banks it sends the application to. So although bank declines are up 10%, ooba has only experienced a 6% increase in declines given its ability to shop the loan to the other major lenders.

Saul Geffen, chief executive of ooba (formerly MortgageSA), the country's largest mortgage originator, said that rental yields are rapidly improving, underlining the investment case for buy to let.

"The price boom of the last decade pumped up the capital values of property, outstripping the rises in rents which is typical of a bull market in house prices.

"But now that house prices are stagnant and falling in some areas and the rentals are on the rise, the rental yields have picked up making buy to let an attractive proposition once again."

According to residential letting agents Trafalgar, rents are moving upwards with the Trafalgar rental index for December 2007 up 9% on December 2006.

ooba's tips for investing in a but to let property:

1. Choose a promising area

Promising does not mean most expensive or cheapest. Promising means a place where people would like to live and this can be for a variety of reasons. Where in your town has a special appeal? Where are the good schools for young families? Where do the students want to live? Have a look at the homes to buy nationwide at www.propertygenie.co.za

2. Do the maths

Before you think about looking around properties sit down with a pen and paper and write down the cost of houses you are looking at and the rent you are likely to get.

3. Shop around

Do not just walk into your bank and ask for a mortgage. It sounds obvious, but people who do this when they need a financial product typically end up with a lower rate concession on their mortgage. Use a credible originator like ooba who can find the best rate going and negotiate with all the banks on your behalf to get the best deal.

4. Think about your target tenant

Instead of imagining whether you would like to live in your investment property, put yourself in the shoes of your target tenant. Who are they and what do they want? If they are students, it needs to be easy to clean and comfortable but not luxurious. If they are young professionals it should be modern and stylish but not overbearing. If it is a family they will have plenty of their own belongings and need a blank canvas.

5. Don't be over ambitious

The days of double digit house price rises are gone for now, so you should invest for income not short-term capital growth. Over time though, capital gains will kick in but you¿ll need to be patient.

6. Consider looking further afield

Most buy-to-let investors look for properties near where they live. But your town may not be the best investment. The advantage of a property close by is being able to keep an eye on it, but if you will be employing an agent they should do that for you. Cast your net wider and look at areas with good commuting links, are popular with families or have a sizeable university.

7. Haggle over price

As a buy-to-let investor in a soft property market, you should haggle to get a good price. If you are not reliant on selling a property to buy another, then you are not part of a chain and represent less of a risk of a sale falling through. This can be useful when negotiating the price.

8. Know the pitfalls

Before you make any investment you should always investigate the negative aspects as well as the positive. The general consensus is that house prices are relatively stable, but they may drop slightly or even considerably. If that is the case will you be able to continue your investment? Even in popular areas properties can sit empty. One rule of thumb many buy-to-let investors apply is to factor in the property sitting empty for two months of the year ¿ this gives a substantial buffer. Homes often need repairing and things can go wrong. If you do not have enough in the bank to cover a major repair to your property, do not invest yet.

9. Consider how hands-on you want to be

Buying a property is only the first step. Then you need to decide if you¿ll rent it out yourself or get an agent to do so. Agents will charge you a management fee, but will deal with any problems and have a good network of plumbers, electricians and other workers if things go wrong. You can make more money by renting the property out yourself but be prepared to give up weekends and evenings on viewings, advertising and repairs.

According to the UK's Home Office Statistics, home owners are twice as likely to be burgled within 12 months of moving homes.

"In South Africa, it is more than likely that this is true as home owners are unfamiliar with the 'weak' spots in their home security," says Mary-Jane Lefevre; call centre manager at ooba (formerly MortgageSA).

"Safety will always be a priority in South Africa," says Lefevre. "Securing your home should be one of the first things you do when you move into a new home."

When moving into a new home 'act like a skelm' suggests Lefevre.

"Carefully case out your new home as a potential target," says Lefevre. "Try all the access points such as gates, windows, doors and even the roof to see if there are any potential entries."

The most valuable asset a burglar has is time, so any preventative measure installed to delay his entrance is beneficial.

"Tidy up your garden,¿ says Lefevre. ¿Having a tidy, trim garden will make it more difficult for anyone to hide effectively."

Home owners can also consider using solar lights to light up garden dark spots.

"These are cheap, and don¿t run off electricity," says Lefevre. "Bright sensor lights can also light up large areas if they detect movement."

Anything that makes a noise is advantageous. Install a good sensor alarm and test it regularly and have it linked to a reputable security company.

Outside beams and electric fences are also effective security measures. However check with your security company what will happen in the event of load shedding. Burglars can take advantage of load shedding times as these are published in advance in the press.

"Go and meet the new neighbours," suggests Lefevre. "Offer to watch their place in return for them keeping an eye on yours and report any suspicious activity. It may also be an idea to motivate a security guard for your street; if everyone participates it need not be a costly exercise."

It is very important to not only secure your home but also be aware of your surroundings when entering and leaving your home.

"Home owners should be aware that many of these burglaries are opportunistic," comments Lefevre. "Although you may be relaxing at home always ensure that the entrances are secured, never open the door without checking the person's identity first and don't take it for granted that the person at the door is who they say they are."

Even if your door has a safety chain on it, don't open it if you are not sure of who is there. It is very easy to use force to open a door that is on a safety chain."

Ensure that you check with the previous owners if there are keys which may be with other parties," suggests Lefevre. "Better still, change the locks, this way you can be sure that no one else has the keys and always keep your car and house keys with you in your bedroom at night."

Having a secure home will not only protect you and your family but will also add value to your home. South Africans are security conscious and a property that appears to be unsecure will immediately be perceived as less valuable.

"One of the first questions potential buyers ask is 'is the property secure'." Prevention is vital in the fight against crime," says Lefevre. "Securing your home is crucial for your own peace of mind and the future safety of you and your family."

Jenny Rushin, Provincial Sales Manager for ooba (formerly MortgageSA), says that sellers need to do the running now.

"It's a good idea to spend a bit of money to make sure homes are 'doctored' to make them as presentable as possible. It needn't cost a lot and even basic things can make a big difference when it comes to getting the price you want."

ooba's top tips for making your home ooba saleable:

1. Drop the price

Price is the biggest inhibitor to any sale. To price a house correctly choose three of the most active agents in your area and ask them for a valuation. Says Rushin: "Tell the agent you want honest, realistic figures, then apply a margin in excess of this figure, depending on how urgent the sale is. Note that houses that are priced too high in a slow market, like the one we are currently experiencing, are unlikely to move".

2. Curb appeal

Don't focus all your efforts on the inside. Remember that first impressions are created as prospective buyers approach the building. "Mow the lawn, trim hedges, weed flower beds, plant a few conspicuous shrubs so that it looks well-kept and tidy," notes Rushin.

3. Declutter

Ask an honest friend who has not seen your property for a while to advise on what to hide or throw ¿ a fresh perspective always helps. "Remember that kids and smelly dogs can be a big turn off for buyers," advises Rushin.

4. Don't stuff everything into cupboards

Tidying up doesn't mean you should chuck everything into a cupboard and hope it doesn't burst open. You'll never find your stuff again and besides, lots of potential buyers like to open cupboards to get a sense of the storage space.

5. Move out spare furniture from bedrooms

But don't turn rooms into a barren space as they can look surprisingly small when empty. "It's also harder for a buyer to imagine what the house will look like furnished," notes Rushin.

6. Definition

Make sure each room is kitted out for the purpose it is intended for - buyers will be better able to conceptualize a room¿s purpose if it is obvious.

7. Create an appealing social environment

If your home is sparsely decorated it might require acquiring new furniture to give prospective buyers an impression of how they would live in the property and where they would socialise.

8. Do basic repairs

"This is really important as buyers mark the price down the more work they see for themselves," says Rushin.

Go through each room and do any minor jobs you can see would improve the finish at little expense, such as touching up paintwork, filling cracks, regrouting, straightening cupboard doors, replacing/polishing door handles. Make sure you fix dripping taps, cracked panes of glass and peeling wallpaper.

9. Clean

And then clean again. Make sure everywhere is spotless, particularly bathrooms and kitchens.

10. Don't spend money on expensive improvements

"Making a home saleable is not about expensive or time consuming improvements such as a installing a new kitchen," warns Rushin.

The idea is to rapidly make their properties more appealing to a broader range of sellers without having to drop the price so minor paint jobs and sprucing up each room to an equal standard is key. If you have dirty carpets however, cleaning them up or putting down cheap, alternate flooring might be a good idea.

And finally Rushin advises sellers to be patient: Don't panic and don't give up. Accept that the time taken to sell properties has increased."

Rising interest rates, rampant petrol price increases and soaring food prices are putting the pinch on consumers' pockets and threatening their ability to repay their home loans.

But Stef Fourie, the Managing Executive of Property Finance for ooba (formerly MortgageSA), says that although South Africans are facing much tougher economic conditions than they have for years, they should do all they can to hang on to their houses as it's one of the best investments anyone can ever make.

"If you are struggling to pay your mortgage, these are some things which can make meeting your bond repayments easier to meet."

1. Renegotiate your home loan rate
This is perhaps the easiest and most effective method to put more money back in your pocket. Homeowners forget that as prices of their homes rise over time, the ratio of the outstanding amount owing to the house¿s value drops making you less of a risk to the lending bank. This will put you in a strong position to negotiate a better rate which can shave hundreds of rand off your monthly repayments. Struggling or not, ooba advises that it is always worth trying to get a better rate.

2. Extend your mortgage term
If your monthly mortgage payments are getting on top of you, consider extending your mortgage term. By doing this you will see your monthly payments reduce. The downside is that you will end up paying more interest in the long term. However, if it means you are able to continue meeting the minimum mortgage payments, it is worth doing.

3. Buy a cheaper car
It's a bit of a South African syndrome to buy expensive cars on credit. The thing is that cars are a depreciating asset whereas a property¿s value increases over time. It may be worth considering trading in an expensive car for a more modest set of wheels, freeing up money for home loan repayments.

Trim the luxuries
If you are struggling to pay your mortgage, don¿t bury your head in the sand hoping it will go away. Instead, ooba suggests you take a calm and reflective view of your financial situation. Look very closely at other areas of expenditure you might be able to trim. For example DSTV costs, and eating out regularly can easily cost more that R1000 a month.

5. Take in a lodger
Taking in a lodger is not as bad as some people think. If you have a spare room, the extra income could be up to 50% of your bond payment. There is some inconvenience, but it is a small price to pay for the extra income. If you are uncertain about taking in an extra lodger, remember, you are able to choose who lives with you. Make sure you meet them before they enter.

6. Payment holidays
If you are in difficulty it is best to ring your bank and explain the situation before you go into arrears. They may be able to make some temporary allowances. However, this does not tackle the fundamental problem.

7. Downsize
This option is probably the most drastic and only for when the others have failed. If you are able to sell your house, you can temporarily rent somewhere cheaper or buy a cheaper house in a different location. The money saved can be used to pay off your mortgage. This option is not easy, due to the costs involved in moving, but it might be worth doing in the long term.

MortgageSA, the country's leading bond originator, which pioneered the industry in South Africa just under a decade ago, announced today that it will be changing its name to "ooba". The name change reflects the company's evolved offering which now extends beyond bond origination.

ooba, an authorised financial services provider, currently offers the full spectrum of homebuyer related financial services including bond origination and all related insurance and assurance products. The company also operates the country's largest online property search portal for homebuyers, with over 144 000 homes from the country's leading estate agencies.

Coinciding with the name change, ooba has launched a new credit card for homeowners.

The company's fully integrated homeowner services offerings have been re-branded oobasearch, oobabond, oobainsure, and oobacard, respectively.

Saul Geffen, Chief Executive of ooba says that "the name MortgageSA no longer reflects the diversity of services and expertise that the company offers its clients. The offerings have for some time extended well beyond mortgage origination, and our name needed to change to facilitate our vision."

"We've developed our bond origination expertise into a complete home-ownership solution that offers convenience, expertise and savings for the homeowner. With the addition of the oobacard, ooba is the only company in South Africa able to offer homebuyers a complete solution from searching for a home, to financing it, insuring it and ultimately enjoying living in it" says Geffen.

"ooba" is derived from the universally used word über, meaning "super", "the ultimate", "the best".

"The oobacard is unlike any credit card offered in South Africa as it is specifically geared to save homeowners money when moving into their home," says Geffen. "The oobacard is exclusively available to customers who have sourced their home loan finance through oobabond".

The oobacard gives cardholders significant discounts of between 7.5%-35% at the leading national retailers and providers of home-related products and services, including Mr Price Home, Weylandts, ADT Security, SA Paving, Pickfords, Glasfit, Wonder Flooring, Water Comfort, House of Paint and MWEB. The entire discount programme is totally automated, and cardholder discounts either reflect at point-of-sale, or on the cardholder's statement, depending on the merchant.

"When a customer buys a house they will go through the costly exercise of moving into the home and spending on household contents, services and improvements," says Geffen. "The oobacard provides access to credit to manage the costs of moving, and gives substantial savings on everything from the move, to improving the property, buying necessary household goods and securing vital services like security and internet connectivity."

The oobacard offers all the benefits of a gold card, as well as the additional advantage of a garage card with free roadside assistance. The oobacard is issued in partnership with ABSA Bank, under licence of MasterCard.

"ooba now provides homebuyers with the first fully comprehensive homeowner services company in South Africa," concludes Geffen.

MortgageSA's Chief Executive Officer, Saul Geffen, said that "the LoanLink acquisition enhanced MortgageSA's strategic positioning in the bond origination market and increased distribution. MortgageSA is well positioned to add significantly to the value of the LoanLink businesses."

"Acquiring the industry's largest franchise operator provides the opportunity for MortgageSA to grow a franchise network, complementing MortgageSA?s existing wholly-owned model. The deal will also enable MortgageSA to leverage its national infrastructure and expertise in mortgage sales and processing to the benefit of both groups" continues Geffen.

LoanLink's Managing Director, Piet de Jongh, said that "synergies and knowledge sharing will dramatically enhance the prospects of the LoanLink Group, its franchised brands and, importantly, the service experience of the consumer. Both the Wizard and Quantro networks are committed to service excellence."

LoanLink will continue to operate its franchise operation independently under the Wizard and Quantro brands. LoanLink's existing management is being retained in order to provide continuity and independent operation.

60% of South Africans admit to impulse buying and with Christmas season debt and rapidly increasing interest rates South African households need to take control of unruly household expenses.

The average shopper in South Africa visit 19 stores a month, twice a week they go to the supermarket and 60% of South Africans admit to impulse buying according to ACNielson, an international marketing research company.

Groceries are one of the biggest culprits of household expenses and ACNielson states that R16 of every R100 spent on groceries in South Africa goes towards alcohol. It is the largest category of spending and growing at 8.7%.

"People only really begin to budget household expenses when finances are already out of control" says Saul Geffen Chief Executive of MortgageSA, South Africa's leading mortgage originator.

"Most households are aware of what money is coming into the house every month, but many have no idea where it is going to.

"This becomes a very dangerous financial position to find yourself in" warns Geffen.

"Pay yourself first" urges Geffen. "With urgent household bills coming in every month it is very easy to get caught up in the here and now and not worry about the future. Before you pay any bills, set aside a certain amount every month into an investment that is not easily accessed.

"Better still, put in a debit order so that you are unable to change it that easily," advises Geffen.

"Calculate all your fixed household expenses such as mortgage, insurance, telephone and internet lines and car repayments; everything that is a set monthly payment," says Geffen.

Shop around for the best deal you can possibly find, this includes household insurance and your mortgage.

"Now, it is the more tricky part of the process, accounting for all the additional, fluctuating expenses" says Geffen.

"If you are serious about cutting household costs you will need to be prepared to plan and organise. For the first two months keep every single receipt that you get throughout the month, including petrol, groceries and dinners out," says Geffen.

"Write down payments made in cash and include seemingly superfluous expenses such as car washes, dry cleaning, gifts and money spent at petrol stations and corner shops.

"Calculate all your monthly expenses against your total monthly income and hopefully, it should be above zero" says Geffen. "Even if it is well above zero most households will be shocked at the amount of unnecessary money their household is hemorrhaging.

"Once this is completed, set up a reasonable budget which makes provision for each of the category" says Geffen. "The more specific the category the more control you will have over your budget.

It might be advisable to even split your grocery budget into sections in the beginning to ensure that 16% of your entire grocery bill isn't going towards alcohol or other unnecessary items," Geffen recommends.

"This doesn't mean that your family should go hungry, there are many alternative cheaper options such as no name brand products that can be substituted to meet the budget," says Geffen.

While it is unlikely that you will always be within budget - the aim of this ongoing exercise is to create awareness of household spending.

"Once your budget is up and running you should be conscious of what money comes in and out of your household and you will be in a far better position to control the outflow" Geffen concludes.

Clever renovations can significantly increase the market value of one¿s home - and they don¿t need to break the bank.

Saul Geffen, Managing Director of MortgageSA, South Africa¿s leading mortgage originator, says, "There are various means to finance renovations, even if you don¿t have the available cash resources. You can apply for a re advance on your bond if a portion of the loan has already been paid off. For example, if you initially raised a bond of R500 000 and you have already paid off R200 000, you are able to take debt back up to the original amount of R500 000.

"Another option is to take out a second bond. This would normally only be possible where the value of your property has increased since purchase, as the second bond would have to be raised against any increase in the value of the property. Taking out a second bond does mean that additional registration fees associated with a new bond would be incurred, such as bond registration costs, conveyancing fees and the cost of valuing the property.

"To fund extensions or additions to an existing property, the proposed extensions must conform to national building regulations. This means that proposed plans will have to be approved and meet the municipal requirements, as these plans will need to be submitted with your application for the second bond."

According to MortgageSA, renovations to kitchen and bathrooms can generate a return on investment of between 60-80%. If, for example, you spend R10 000 on your bathroom renovations, this could increase the total value of your home by up to R18 000.

"You don¿t necessarily need to spend a fortune on renovations. Replacing countertops and flooring with inexpensive tiles, re-enameling baths and basins and re-grouting existing tiles in a bathroom can all have a major impact on the aesthetics and thus the inherent value of the property. Replacing old taps, light fittings and towel rails and installing mirrors or even re-painting can make the room appear more spacious and clean. As long as there are no plumbing complications, aesthetic renovations shouldn¿t end up being too expensive.

"Adding an additional room onto your property can produce up to a 70-80% return. However, it is important not to overdevelop a property ¿ a third bedroom is more valuable than a fourth ¿ you don¿t want to create a rabbit warren."

Geffen adds that it is important not to over capitalize; no one wants to buy a property that doesn¿t fit into an area and buyers will usually not pay R1 million when the area¿s going rate is R500 000, gold taps or no gold taps.

"You should keep your property value variation between 15% and 20% of others in your suburb. Buyers who can afford more expensive homes will invariably shop in more expensive areas.

"You should always keep a record of your expenditure especially as this can be set-off against any capital gain made at the time of resale which exceeds the exemption amount, thus reducing your potential tax liability at the time. At the end of the day, you should also bear in mind that economic conditions will always influence the actual resale value of your property."

Home loan interest rates - currently at 10.5 percent - are at their lowest level in years. But many consumers don¿t know how to tap this financial resource and are wasting money using expensive credit facilities.

Saul Geffen, MD of leading originator MortgageSA says, "Interest charges on traditional sources of credit like overdraft facilities and credit cards are crippling for South African consumers, many of whom are fighting an ongoing battle to escape from the debt trap.

"As many people have found to their cost, succumbing to the lure of the 'buy now, pay later' philosophy can result in the battle to pay balances on cards and other credit facilities.

Geffen says that one way to regain control of your finances is to consolidate all your existing debts in your mortgage bond account.

"By borrowing funds from your access bond account to pay off all higher interest accounts, you will in effect be moving your accumulated debts into a single account that offers much lower interest charges.

"If consumers tally up the total interest charges on all their debts both before and after consolidating these debts in their home loan account, they will see the accelerated reduction effect of using this financial option."

However, Geffen points out that it is vital for consumers who opt to consolidate their debt through their bond account to bear in mind that, while this financial option will enable them to pay their debts with less interest overall, their monthly bond payments will increase accordingly and they will pay more over the long term.

"It is also important for consumers to note the need to curb future spending in order to manage their debt effectively, as they should not continue to borrow against their bond.

"Owning a property provides significant financial stability and is one of the best means to accumulate long-term wealth. Accessing this capital in the short term has a corrosive effect and home owners may find the gain from their most significant asset devalue down the line."

Geffen warns that consolidating your debts under the mortgage bond requires strict financial discipline and is not suited to all people.

Before consumers take the step of consolidating their debts in a home loan account, Geffen again advises them to ¿stress test¿ their budgets, as well as their financial accounts. This will ensure that they are not over-extending themselves financially and will still be able to meet their bond repayments should interest rates rise

Could cost buyers hundreds of thousands of Rands extra

Many first time homebuyers are missing out on the best bond deals - simply because they don¿t know of their existence or don¿t know where to seek advice on home loans.

MortgageSA Managing Director Saul Geffen says, "Most first time homeowners are unaware that they can obtain a 108% bond or that getting impartial advice from an originator is absolutely free. "They often end up not securing a more favourable rate and aren¿t aware that they need not feel intimidated by the process when there is reliable and friendly free help a telephone call away.

"Paying an unnecessarily high rate for a home loan can end up costing a buyer hundreds of thousands of Rands extra over the normal 20 year lifespan of a bond."

Geffen says 108% financing available to first time homebuyers covers the cost of the property as well the transfer duty and related start up costs, typically, conveyancing fees, bond registration costs and the cost of valuing the property.

"This means that the home buyer just needs to be able to afford the monthly home loan repayment. New buyers won¿t have to pay a deposit and the 100% portion of the home loan will be allocated to the cost of the property and the 8% will go to cover the transfer duty and start up costs.

"It¿s a fantastic opportunity to get involved in the property market as most young people find it difficult to save up for the deposit and transfer duty and other costs. Products that offer 108% financing have increased the number of homeowners because it assists people to get into the property market early without having to save for the initial deposit, which can take a fairly lengthy time to accumulate and thus increase the barriers to entry.

"Some banks will require you to pay back the transfer duty and start up costs over 5 years, whereas other banks capitalise the costs over 20 years."

Geffen says most first time buyers can borrow at better than prime especially if a reputable mortgage originator negotiates with the banks on the buyer¿s behalf.

"Recently we negotiated 1.7% below prime for a first time buyer who paid a 20% deposit; the discount to prime is normally around 0.9 to 1% for first time buyers. Of course, in each case, it depends on the individual circumstances of the applicant."

Geffen says that first time buyers should take advantage of banks willingness to lend them money as it will enable more young South Africans to get a footing on the property ladder, a fundamental concept in wealth creation.

As the value of property increases, more and more people are refinancing to unlock the value in their home but few people realize how it really works, its true cost ¿ or even that the option exists.

Saul Geffen, Managing Director of MortgageSA, South Africa¿s leading mortgage originator says, ¿Many people have a lot of equity sitting in their homes thanks to the strong price gains over the last few years and want to access that money in their property through refinancing, whether by way of a re-advance or by registering a second bond over their property. Homeowners who are bond-free can also refinance their properties to raise capital.

"In the past year alone the market for further advances and readvances has grown in excess of 20% and shows no signs of slowing down.

"We have experienced a surge of people applying to us for re-advances and second bonds to finance renovations, new cars and other capital expenditure.

"Using a refinancing facility is also a cheaper way to access finance than say obtaining a personal loan or financing a car through the traditional means. This is because home loan rates are typically the lowest of all financing methods. It can also be a convenient way to consolidate debt by converting short-term liabilities into long-term ones."

Geffen says that to refinance a home, the homeowner typically must apply for a readvance or second bond. During the application process, the home will be appraised to determine its value, and the homeowner's credit file will be reviewed. The lender will also order a title report on the property, to search for any other liens that appear. Assuming all these items meet with the lender's approval, the facility will be approved.

So for example, if you bought a property for R500 000 18 months ago, you may find that the value of the property has increased to say R1 000 000. As a homeowner, you could have access to this extra R500 000 equity in your home.

But Geffen warns that refinancing can be risky and that home-owners should consider the full costs.

Costs typically include second bond registration costs, conveyancing fees and the cost of valuing the property. For a R1 000 000 home loan, the all-inclusive cost would typically add up to R7 500. Although this equates to 0.75% of the loan amount, it still needs to be weighed against the long-term benefit of refinancing.

Geffen says however that customers must be able to afford the increased instalments from the increased loan and they need to be sensible about what they spend the extra money on. They should also be aware that the value of a home can also depreciate, and if a second bond is taken out this could lead to a situation of negative equity.

"This is why it is preferable to use the additional funds that have been accessed through refinancing for property improvements, and so further increase the property¿s value."

Geffen also notes that if the same property bought for R500 000 is now valued at R1m, an opportunity exists to negotiate a more favourable interest rate now that the loan-to-value ratio has fallen significantly.

"Quality originators offer free advice on the questions homeowners typically have about the costs associated with refinancing and can help clients to understand the personal financial planning implications of refinancing their homes."

"It¿s not only those who get a readvance that benefit from the increase in property values, but also those that take the trouble to renegotiate the rate that they are being charged on their existing home loan."

"We have negotiated more favourable rates for customers as their loan-to-value ratio improves - in most cases this is preferable to switching and incurring unnecessary costs and hassles."

MortgageSA, South Africa¿s leading mortgage originator placing one in five mortgages, said that the possibility of a fixed mortgage system, currently being discussed by the Reserve Bank, could be a double-edged sword for consumers.

"While it is difficult to comment without knowing the full details, a fixed mortgage system may reduce overall volatility risk, but will inevitably result in higher interest charges and higher mortgage repayments for consumers.

"Although we fully support the reserve bank¿s agenda of promoting access to home ownership, removing such risk will come at a cost," said MortgageSA chief executive Saul Geffen.

Geffen notes that interest rate concessions for variable mortgages are at their highest level ever, with the average rate concession now around 1.5% below prime, while maximum concessions can be up to 2.25%. Historically, fixed rate mortgages are offered by the banks on a prime plus basis as it costs the banks to hedge the interest rate risk and they pass this cost on to the consumer.

"Should there be a move to a fixed mortgage system, a one percent cutback in the rate concessions currently offered to borrowers would cost homebuyers over R24 billion a year (based on the total new residential home loans of R150 billion per annum and the average 20 year life of the bonds).

"The real cost is more likely to be R48 billion as the cost of hedging will most likely add two percent to the funding costs. The costs of hedging the entire R600 billion SA home loan book would be obscene.

"While the volatility of interest rates is a financial risk associated with buying a home, fixed interest rate products are freely available from all the financial institutions, enabling borrowers to completely mitigate this risk.

"In circumstances where fixed rate products are a commodity, it seems that an artificial fixed mortgage system will only create unnecessary complexity. Borrowers should be able to choose whether they prefer a variable rate or fixed rate mortgage depending on their individual risk profile and affordability. A one-size-fits-all approach is not consumer friendly."

Geffen notes that the current system works very well, and the volatility of interest rates is not a real factor in the housing market, as long as interest rates are kept within affordable limits. Homebuyers buy within their means, and the SA housing market has experienced a prolonged boom despite a relatively volatile interest rate environment. High interest rates are a real barrier to entry in the property market, however the potential volatility of interest rates are not.

"The possibility of greater certainty for home loan borrowers will be more than offset by the cost to consumers of increased interest charges. Countries such as the US, UK, Australia and Canada which have healthy functioning property markets operate on a similar basis to the current situation in SA. They do have longer term fixed rate products, up to 30 years, but SA is not far behind in product development and we believe it is not long before a 20 year fixed rate product is offered by all the major institutions in SA. Already, fixed rate products of up to 20 years are offered by some SA non-bank home loan providers."

Geffen says the Reserve Bank has done a commendable job over the past few years in lowering interest rates and keeping them low.

"The lower rates have improved affordability and enabled many South Africans to own their own property. We strongly believe that if government sticks to its sound fiscal policies, there should be a continued structural decline in interest rates and improved interest rate stability and this will facilitate and sustain broader participation in the property market."

Geffen said the full impact on the property market could only be determined when and if such a system was formerly proposed.

With stock markets in seesaw mode, the stability of property as an investment asset class has once again come to the fore.

"House prices are expected to increase by 12% this year and while this may not be as high as in recent years, it still represents a good return" says Saul Geffen, Chief Executive of leading mortgage originator, MortgageSA.

Geffen says would-be house buyers or property investors who plan to finance their purchase via a mortgage still need to pay particular attention to issues of affordability.

"To make the best decisions you need to be sure you know the full financial impact of a mortgage on your personal finances.

"We have always put affordability at the forefront of the decision making process," said Geffen.

Geffen says many homebuyers tend to start from the premise that the banks and mortgage providers initially calculate the amounts that they are prepared to lend to creditworthy customers based on monthly repayments that equate to 30% of an individual or couple¿s combined gross (pre-tax) monthly income.

For example, an individual or couple-combined earning R 40 000 per month before tax may well be granted a home loan with a monthly repayment of R 12 000. Geffen says at this point many homebuyers approach mortgage originators to help them find the competitive interest rates on offer from the banks.

"Shopping around for a competitive interest rate will have a significant influence on your monthly repayment," he says.

But Geffen says that this is not the end of the story and advises those thinking about taking on mortgages to approach the affordability issue from the following perspective:

The full 30% probably equates to about half of your after tax income, and that¿s before you have paid any other monthly expenses

So, first work out a monthly repayment amount that you are comfortable with weighed up against your existing fixed expenses and with a clear understanding of the levels of variable monthly expenses you currently incur

If you are currently paying rent you can factor that into a mortgage repayment as it is an expense you won¿t have in your own home

Ask yourself if you have any money for the upfront costs associated with buying a home. If not, then these have to be factored into the home loan, which means there is less available to put down on the house. These costs can add up to around 8% of the value of the property

If you are a first-time homebuyer be aware of the other monthly fixed costs that come with owning a property. Depending on what you buy these costs can include:

As interest rates rise, homeowners have an even bigger incentive to invest in their bonds, as they will be saving even more interest while benefiting from the secondary advantage of a shorter term of repayment.

Saul Geffen, Chief Executive of MortgageSA, South Africa¿s leading mortgage originator, says that when interest rates rise, putting money into your bond guarantees a bigger interest saving.

"But while people understand this intuitively, they don¿t realise paying extra sharply reduces the time it takes to repay a bond because the interest savings are so significant.

"It¿s always a good idea to get bond free as soon as possible because of