Read also the following recent articles regarding property:

• Property remains sluggish (According to Standard Bank there will be no quick turnaround for property.)

• Recovery gains momentum (According to Absa, the property recovery is expected to gather further momentum in 2010.)

• Banks granting more loans (Bank decline ratios have fallen and are expected to improve even further. Time to try again?)

• Property goes positive (After almost a year of decline, house prices have grown for the third month in a row.)

• Property demand growing (FNB's latest Property Barometer shows demand for residential property is still strengthening.)

The latest statistics released by bond origination company ooba reveal that the decision by banks in August 2009 to start granting 100 percent bonds has significantly boosted the number of consumers applying for home loans.

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 percent home loans is a sign of confidence in the local property market, 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 percent bonds has jumped to 44 percent of overall applications in December 2009, up from 18 percent three months earlier. However, the approval rate on these applications is significantly lower and nearly half of the bank approvals on these 100 percent 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 percent loan-to-value (LTV) applications and the reluctance by banks to grant the full 100 percent of loan amounts applied for, there has been a 10.5 percent 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 percent month on month increase in the average deposit size during January.

The oobarometer price index recorded a 4.9 percent year-on-year rise in the average house purchase price in January to R830 513 from R791 552 in January 2009. "This is the eighth 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 percent. The ratio of applications declined by one lender but approved by another reflected a month-on-month increase of 3.2 percent 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.