Experts agree that aggressive lending by banks is not yet in full swing and that the property market's recovery is tenuous.

Banks think that the risks are still high and major job losses are not yet a thing of the past.

"Their attitude appears to be that positions of many employees in all sectors could still be at risk," said Ivan Neethling, chairman of the Western Cape branch of the Institute of Estate Agents.

"For this reason, it may be some time before anyone other than the most secure and financially stable will qualify for bonds."

"I have recently come across cases in which qualified professionals such as chartered accountants and a paediatrician failed to get the full bonds for which they applied regardless of the fact that they qualified for the full amounts and that there was sufficient equity in the properties they wanted to acquire. In one instance, one of the banks offered a bond of R1m when the applicants had applied for a bond of R1,7m," he said.

John Loos, property strategist at FNB, agrees that banks are still very cautious, but adds that this is not for no reason. "It would appear that we are coming out of recession and heading for slightly better times, but the indicators do not point to a strong recovery, and there are many questions asked about the sustainability of the global recovery.

"What happens when governments withdraw their stimulus packages? What happens when the US raises its interest rates from near zero? Is the world's biggest economy on a strong enough footing to withstand this? Looking at its household and overall indebtedness levels, I'm not sure.

"So, globally the risks are high, while locally, too, we see a household sector which has experienced four consecutive quarters of quarter-to-quarter (q/q) real disposable income decline and whose debt-to-disposable income ratio remains near to record high levels."

Loos says all these dubious economic and household financial and debt numbers don't make for an environment where banks would be confident to lend far more aggressively yet. "So, this time around, while the banks are indeed coming out of the starting blocks, they're coming out slowly, and I believe understandably so."

Jacques du Toit, property economist at Absa, says the household sector and many consumers are still experiencing some financial pressures due to job losses and high levels of debt, and this is despite lower interest rates. "Real household disposable income is declining, which is one of the most important variables when it comes to credit extension."

"Levels of consumer spending, especially retail sales, confirm these trends. Banks are taking note of these conditions and have already implemented some selective relaxation of credit criteria, keeping in mind the aspect of responsible lending against the background of the National Credit Act (NCA)."

Neethling says the strongest demand for home finance is now coming from the sectional title buyers in the R450k to R490k range. "In this sector, we are at last seeing a flurry of activity from developers who realise that banks are more disposed to granting bonds in this price range than in other segments of the market.

Neethling says on many projects, developers have been drawing in buyers with a variety of additional extras such as burglar alarms, roll-on lawns, post boxes, boundary walls and the like.

"Even these, however, are sometimes insufficient to get the project selling quickly.

"Developers who have been holding land with a view of turning a profit, increasingly find that the debt servicing and other costs such as rates and protecting the property from illegal occupation, are eroding the possibilities of ever seeing a return on their investments."

The good news, Neethling added, is that 2010 will see the first real price rises in the residential property market.

"This sector always reacts to the latest changes in interest rates three to six months after they have taken place. The exceptionally low interest rates in the UK and USA have resulted in three to four months of rising house prices. I see the same happening here. Now that we have had five consecutive rate cuts, sales are bound to improve.

"Many agents are already predicting that we will have shortfalls in the stock levels of new houses in 2010. This is directly attributable to the lack of activity by developers and the shortage of bond finance." – Eugene Brink