A house for sale in Diepkloof ext Soweto. Photo: Leon Nicholas

Banks are now granting more 100 percent mortgage bonds, according to mortgage originator BetterBond.

However, BetterBond chief executive Rudi Botha said banks had also once again raised the deposit requirements for those who did not qualify for 100 percent loans.

Botha said its latest statistics showed that the percentage of 100 percent bonds granted increased to 41 percent last month from 37 percent in May.

But Botha said the average percentage of the purchase price that non-100 percent borrowers were required to pay as a deposit to secure a loan rose to 19.1 percent last month from 17.1 percent in May.

Botha said this coincided with an across-the-board increase in the prices being paid by homebuyers and supported BetterBond’s observations that the higher the home price, the higher the deposit percentage was likely to be.

He said this was evident in the latest statistics from BetterBond, which originated 25 percent of all residential bonds registered in the deeds office.

Botha said most of the 100 percent bonds granted currently were for buyers at the lower end of the price scale.

This was good news for the property industry because it helped more people to gain entry to the property market and steadily expanded the size of the market, he said.

“First-time buyers currently account for 41 percent of the total number of loan applications and about 36 percent of all loans granted,” he said.

Mortgage originator ooba agreed with this view, reporting that last month was the 14th consecutive month of price growth for first-time buyers and the eighth consecutive month of growth in overall residential property prices.

The average price paid by first-time buyers last month at R682 042 was 13 percent higher than in June last year and 52 percent of the home loan applications ooba received last month were from first-time buyers, 3.8 percentage points higher than a year ago.

Kevin Mountjoy, ooba’s national sales manager, said banks had eased their lending criteria but were far more likely to approve a home loan at a favourable interest rate if the buyer could offer a deposit.

Statistics gathered by ooba showed the average approved bond size increased by 4.5 percent to R733 833 last month from a year ago while the average deposit as a percentage of the purchase price was 15 percent compared with 13.7 percent in June last year.

FNB Housing Finance chief executive Marius Marais reported last month that nine in 10 of its new customers in the affordable housing market were first-time home buyers.

Botha said the average home price paid last month was R857 000, which was higher than the R838 000 recorded in May and R843 000 in April.

He said this increase, combined with the larger deposit required, meant the average buyer last month who did not secure a 100 percent loan was required to pay a deposit of about R164 000 compared with about R143 000 in May.

Botha said the average price paid by first-time buyers last month was R615 000 compared with R597 000 in May and the average percentage required as a deposit by these buyers who did not secure 100 percent loans rose to 11.5 percent last month from 10.3 percent in May.