According to the bank the smoothed growth rate for November showed that the value of the median residential properties financed by Standard Bank was R550k.
There are signs that the residential property market has turned the corner and that interest in residential property is returning, said Standard Bank's Johan Botha.
"However, in real terms, using our estimate of the CPI in November to deflate nominal house price, the decline in real house prices comes to approximately 10,7% y/y from 10,5% y/y in October."
Botha noted that although price declines were continuing, the rate of decline was diminishing.
"What is also interest from our data is that prospective buyers are returning and that the loosening of credit criteria announced at the beginning of September is being reflected in the number of loan applications and loans granted," said Botha.
However, Standard Bank said that despite positive economic growth reported in the third quarter, the economy was still under tremendous strain.
Furthermore, the residential property market is likely to lag developments in the economy, it said.
A number of downside risks are still present: the global recovery is not yet firmly established; a relatively strong rand could impact adversely on exports and economic growth; consumer and business confidence are fragile; and a pressurised labour market with potentially deeper job losses may occur.
"This will make for a subdued recovery in the property market, which is unlikely to gather much traction this year. We therefore expect a slow start to 2010," said Standard Bank.
Looking ahead, the bank said that in spite of the economy emerging from recession in Q3, important drivers of household spending in the economy, such as the level of household income and debt, do not point to a quick turnaround in the housing market.
"There are signs, though, that house prices have reached the bottom and that house price growth could turn positive by the second quarter of 2010," the bank said. – I-Net Bridge
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