Seeff Properties chairman Samuel Seeff cites the SA Reserve Bank's recent decision to keep the interest rate on hold as the key driver of improved sentiment. Seeff says it seems increasingly likely that in six months' time people will look back and realise this was indeed the bottom of the residential property market.
However, data released recently by mortgage lenders and other industry players doesn't support hopes of a quick recovery in house-buying activity. The general view among economists is that the effect of higher interest rates could take another 12 months to play itself out.
Standard Bank's latest monthly property gauge shows that house price growth remains in negative territory, with median prices down - 1,8% in August - the sixth consecutive month that median prices fell and bringing the five-month moving average to -7,7%.
Standard Bank economist Johan Botha says he doesn't expect a housing market recovery anytime soon. "Residential property will remain in the doldrums until fundamental drivers - such as disposable income and interest rates - turn the corner. The first signs of a looser monetary policy are only expected well into next year."
Absa Home Loans senior property analyst Jacques du Toit forecasts a further slowdown in house price growth from current levels for the remainder of this year and into first-half 2009. "The residential property market is only set to recover gradually from late next year, when financial pressure on households starts to ease."
Rael Levitt, chief executive of auctioneers and valuators the Alliance Group, says the massive increase in distressed sales coming to auction over recent months indicates property owners will remain burdened with the high cost of borrowing for "some time to come".
The Alliance Group has seen a tenfold increase in the number of distressed sales over the past year, when homeowners were forced to sell because they could no longer afford to hold on to their properties. Levitt says the company will put 123 residential properties up for auction this month alone. In September last year it handled just 12 distressed sales.
Other industry players note the number of property transactions has decreased so dramatically over the past year that sales volumes are unlikely to return to 2006/2007 levels before 2010. "The correction could take 18 months before we'll begin the cyclical shift from a buyer's to a seller's market again," says SA Property Transfer Guide national training manager Dieter Deppisch.
SA's largest estate agency group - RE/MAX of Southern Africa, in conjunction with BetterBond - released some alarming figures recently. They showed the number of property sales valued between R1,5m and R2,5m dived by 50% between January and July this year (year-on-year). Housing transactions across all price brackets dropped by 38% over the same period. - Joan Muller
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