House prices spike

Standard Bank's median house price jumped by a surprising 3.6 percent y/y in September from a y/y decline of 1.8 percent in August, the banking group's property gauge showed on Thursday.

The median house price in level terms was R580 000 from R550 000 in August while the five-month moving average growth was recorded at 5.5 percent y/y.

"The unexpected 3.6 percent increase in September is not seen as a new trend, but rather the result of volatile monthly data," Standard Bank's economist Johan Botha said.

Although Botha said the latest data suggested that there was life in the market, the market remained in doldrums and that the index will once again show low or negative growth in the coming months until fundamental drivers turn for the better.

The Standard Bank median house price is the middle price on the group's home loans portfolio, and can be considered as a reasonably accurate portrayal of national house price trends, given Standard Bank's market share in the mortgage business.

"Over the short term, economic conditions are expected to deteriorate further, but South Africa's intensifying economic slowdown and the positive developments on the inflation front for early next year, suggest that we could be at a peak in monetary policy tightening," Botha said.

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