THE local residential property market was recovering slowly but moving in the right direction, Samuel Seeff, chairperson of Seeff Properties, said yesterday.
"We've had an increase in turnover and there's a lot more demand in the marketplace but properties are still not flying out the window.
"Transaction times are not as quick as we'd like and banks aren't granting the loans to match demand.
"We're in for a period of slow growth."
As for buying and selling, Seeff said now was a good time to buy. Some sellers were in financial difficulty. From a seller's side there were buyers possibly not at the fullest price, "but close to asking price".
Seeff was speaking yesterday after Absa released its house price index for March.
Home values continued to rise last month compared with a year ago, with a real year-on-year increase in small houses in February, according to Absa, the country's biggest mortgage lender.
The index found that on a month-on-month basis, home values were higher in March from February for small, medium and large houses.
After adjusting for inflation however, house prices in February were still down in medium and large houses on a year-on-year basis, but were up in small housing where the average real value of small houses was up 1,5percent, at R725200.
The average nominal value of a medium-sized house was about R965300 in March, down 2,7percent in real terms February year-on-year after declining 4,5percent in January. The average value of a large house was about R1438200 in March, down 0,9percent in real terms year-on-year in February.
Jacques du Toit, senior property analyst at Absa home loans, said in the report that interest rates were projected to remain unchanged for the rest of the year, after being cut by a further 50 basis points in March this year. A rate hike of 50 basis points is expected in the first quarter of next year.
"But a stiff electricity price hike, as well as food price, rand exchange rate and oil price movements are still regarded as possible threats to the inflation outlook for 2010," Du Toit said.
Growth in the nominal value of houses is forecast to be 6percent to 7percent higher this year compared with last year.