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.