Standard says no letting up in tough South African property market conditions

The Standard Bank median house price eased by 2,6% year-on-year in July, according to its Residential Property Gauge, which notes that the median house price in level terms was R570 000 while the five-month moving average growth was recorded at 8,2%.

Recent point estimates of the growth in the Standard Bank median house price, according to the Gauge, have overstated the extent of the decline in South African residential property prices. This has been the result of the National Credit Act (NCA) induced base effect that was established in the months leading up to the implementation of the Act last year.

Uncertainty regarding the possibility of more stringent credit granting criteria led to an increase in the proportion of higher valued houses in the underlying home loans sample from which the median house price is calculated.

“Subsequently, the reduced affordability of housing led to a decline in the demand for residential property and a substantial softening in house price growth. This was
exacerbated by the base effect, resulting in the deep negative year-on-year growth rates witnessed in the last few months.

 

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