 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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Newsletter:
12 March to 19 March 2010 - Vaal Triangle, South Africa
