House prices not likely to get cheaper

Xolile Bhengu

Xolile Bhengu

The median house price in October was R595000, which is 10,2percent higher than a year ago, Standard Bank reported yesterday.

The bank uses the middle value of the mortgages it extends each month for its property inflation index, while Absa uses its monthly average mortgage value.

Houses are unlikely to get cheaper despite the prime overdraft rate rising from 10,5percent to 14percent in the past 18 months with another 0,5percent rise likely in December.

But the higher interest rates are expected to slow property price growth. "We expect growth to move to single digit results of between 5percent and 10 percent, between now and the second half of 2008," said Standard Bank economist Sizwe Nxedlana.

Last week, a survey by First National Bank found properties took about 12 weeks on the market and sold at less than the initial asking price.