However this has resulted in a very significant cut-back in the number of loans approved, says Tony Clarke, Managing Director of the Rawson Property Group. Approved loans, he says, are now at an all-time low and this is the major factor preventing a full scale recovery in the residential sector.

“By early 2012 the number of bonds issued monthly had dropped from a high of over 50,000 to a low of ± 9,000. New bond registrations are now running at 71% of the total for freehold properties, 16% for sectional title units and 13% for estates. The last figure was the only one to show a rise on 2010, indicating that developers are now coming back to the market for the first time in four years.

“While this massive drop-off in the number of bonds issued may look discouraging for those of us in the property market, we can take heart from certain other data, that show that the loan-to-value ratio, is improving steadily in all except Investec (which came off a very high base) are now showing a willingness to lend bigger loans.

“The average value of bonds approved has risen steadily from ± R400,000 in 2004 to ± R800,000 this year. Second bond values have also increased to ± R350,000 on average this year. The government, and particularly those in its Human Settlements sector, will be encouraged by the number of bonds issued in the affordable category (R250,000 to R700,000) where the figure is up 16%; and in the township category (below R250,000) where the figure is up 13%. Over 45% of all bonds now issued are for homes valued at under R1 million, indicating that the wealth imbalances in South Africa are being slightly ironed out.”