House prices slipped a further 0.8 percent month-on-month in August, and are now 5.5 percent lower than in August 2007, according to mortgage provider ooba's latest 'oobarometer' price index.

The average house price in August 2007 was R821 351 compared with R776 048 the same time this year.

"While house prices continue their downward trend, there have been improvements in average decline ratios and rate concessions," said Saul Geffen, chief executive of ooba.

The barometer shows that the average decline ratio - the average percentage of all home loans applications initially rejected by banks – improved by 1.3 percentage points in August to 49.8 percent, from 51.1 percent in July.

"However, of those initially declined, over 30 percent are approved by another lender ooba sends the application to," notes Geffen.

First-time buyers feel the pinch

The average interest rate concession (to prime) also shows a slight improvement on last month - now at 1.24 percent below prime compared to 1.21 percent in July.

The median rate concession showed a similar trend improving by five basis points to 1.35 percent. The average rate concession for the top 10 percent of customers was 1.91 percent.

However, first-time buyers continue to feel the rates pinch.

The oobarometer shows that the average purchase price for a first-time buyer is 10.7 percent lower than a year ago; now at R489 828 from R548 923 twelve months earlier.

This provides further evidence that first-time buyers are opting for smaller, more affordable homes.

The average deposit on a house has also risen sharply in the past year - rising from 11 percent in August 2007 to 18.8 percent in August this year, reflecting the significant shift in banks' lending criteria, now requiring substantially greater deposits from home buyers.

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