Property market has a long way to go towards recovery

Tamlyn Stewart

Tamlyn Stewart

Homeowners hoping to offload their property within the next year will find it a tough sell. After the release of Standard Bank's residential property index yesterday, economist Johan Botha forecast that residential property would "remain in the doldrums" for the next 12 months.

But property owners can take comfort from the fact that the decline in house prices slowed last month. The bank's index showed that the median house price declined 1,8percent year-on-year to R550000.

The median house price for July was R570000, which was 2,6percent lower than the same month a year ago.

The bank's report said: "Recent monthly estimates of the growth in the Standard Bank median house price have overstated the extent of the decline in South African residential property prices. This has been the result of the National Credit Act-induced base effect that was established in the months leading up to the implementation of the Act last year."

Looking ahead, Botha said there could be an increase in activity in the property market as sellers lower their asking prices. "People have realised that if they actually want to sell their house they should bring the price down a bit.

"It is certainly a buyer's market at the moment - buyers are more relaxed, they can look around a bit more," he said.