Standard: House prices decline 4.9% y/y
The Standard Bank median house price index (smoothed) decreased by 4.9% y/y in June, following on average declines of 3.3% y/y in the first five months of the year, the latest Standard Bank property gauge showed on Wednesday.

"The trend cycle of the June data confirmed that there is still no light at the end of the tunnel and that the weakness in the property market is set to continue," said Standard Bank’s Johan Botha.

The June smoothed rate yielded a steeper rate of contraction of -4.9% compared to a y/y contraction of 4.1% in May.

Botha said that the smoothed growth rate for June showed that the value of the median residential properties financed by Standard Bank was 523,000 rand.

"The overall growth in the economy, the level of household income and household debt, as well as the medium-term outlook, are such that a clear and quick improvement in the housing market is unlikely."

Looking ahead, Botha said over the short term, the economic outlook, as a crucial driver of the housing market, was expected to deteriorate further; however, relatively positive developments on the inflation front and the full impact of interest rate cut would in due course support the property market.

"It is anticipated that house price growth will be negative over the short and medium term, but likely to bottom out towards the end of the year as the effect of interest rate cuts filter through the economy and the property market," said Botha.

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