Banks send mixed signals on housing
TWO of SA's big four banks put out contradictory reports about the state of the housing market yesterday.
FNB and Standard Bank released their November house price indexes and while FNB said house prices showed slight growth last month, Standard Bank said the opposite.
According to FNB, the economic recovery was starting to favour home owners as the value of their homes was on a gradual increase.
The bank's index showed 2percent year-on-year growth in house prices in November, after a period of deflation which started in December last year.
FNB property strategist John Loos said: "This means house prices are starting to inflate and it is a sign that the market is getting stronger.
"This is good news for the current owners but not for potential buyers."
However, Standard Bank's property book for the first 11 months of this year revealed an average monthly decline of 4,3percent in the average house price.
The November data yielded a declining rate of 4,5percent year-on-year, improving slightly from the 4,6percent decline in October. According to the Standard Bank figures, this brought the number of monthly declines to 18 consecutive months.
Standard Bank senior economist Johan Botha said the figures showed that it was a good time to buy, but with an upfront deposit.
"It's not a very good time to sell because prices are declining but we expect prices to increase slightly in the second part of 2010," Botha said.
He said those buyers who could afford to should wait for at least six months. Future declines in prices "would be smaller and smaller".
Economists predict an improvement in the second quarter of next year but said the recovery would not be "radical" as the household sector was still under financial pressure.