Banks at odds over prices
Two of South Africa's big four banks put out contradictory reports about the state of the housing market yesterday.
FNB and Standard Bank released their November house price indexes, but though FNB said house prices showed slight growth last month, Standard Bank said the opposite.
According to FNB, economic recovery was starting to favour homeowners as the value of houses was on a gradual increase.
The bank's index showed two percent year-on-year growth in house prices in November, after a period of deflation which started in December last year.
FNB property strategist John Loos said: "House prices are starting to inflate and it is a sign the market is getting stronger. This is good news for owners, but not for potential buyers."
But Standard Bank's property book for the first 11 months of this year revealed an average monthly decline of 4.3 percent in the average house price.
The November data yielded a declining rate of 4.5 percent year-on-year, improving slightly from the 4.6 percent decline in October.
According to the Standard Bank figures, this brought the number of monthly declines to 18 consecutive months.
Standard Bank senior economist Johan Botha said the figures showed that it was a good time to buy, but with an upfront deposit.
"It is not a good time to sell because prices are declining, but we expect prices to increase slightly in the second part of 2010," Botha said.
He said those who could afford to wait for at least six months before buying should do so when the market improved.
Botha said South Africa has reached the bottom of declines in house prices and future declines "would be smaller".
Economists forecast an improvement in the second quarter of next year, but said the recovery won't be 'radical' as the housing sector was still under financial pressure and high debt levels.
Kevin Lings, an economist at Stanlib, said: "It's important to note that the two banks used their own clients' base, and it wasn't a full national survey."
Article by: Kea Modimoeng - www.iafrica.com