Misleading house stats

Isaac Moledi

Isaac Moledi

A 13,2 percent fall in house prices and a 400 percent increase in the number of house repossessions reported recently was misleading, Leon Barnard, director of personal and business banking products at Standard Bank, told Sowetan.

He said the bank was concerned about the way South African repossession figures were reported recently.

Barnard said that the numbers "are misleading, creating an uglier picture than is necessarily the case".

He said the bank had seen an increase in the number of properties being repossessed but the numbers remained within the bank's expectation.

One must remember that there were technical reasons why prices had fallen so dramatically, he said.

Before the National Credit Act (NCA) came into effect last year in June, estate agents, buyers, sellers and banks had pushed to process loans for higher-valued properties.

The median house price rose substantially simply because houses with higher values made up the bulk of property transfers .

Now, affordability issues meant that more people were buying homes in the lower price range and the basket of houses had changed overall with a greater percentage in the lower price range

"This is not the same thing as the same house selling for 13,2 percent less than a year ago."

Barnard said it was not in the bank's interest to repossess homes and clients should consider the effect of not meeting their home loan repayments .

"Talking to your bank is the most important thing to do if you are unable to meet your current financial obligations.

"It is therefore in the best interest of the bank and our customers if we can assist those customers struggling to meet their obligations by restructuring the debt."