Going Up And Coming Down Aren't Equal

I've often heard people make the comments that "if property prices drop 20% it doesn't matter because they've appreciated 40% so I still have 20% appreciation". That assumption is incorrect. For example let's say your house had a starting price of R1 000 000 and a appreciated 40% to R1 400 000. A 20% depreciation will reduce the price to R1 120 000, not R1 200 000, which is only a 12% appreciation. The following graph illustrates this:
The green line is what people expect to happen - x appreciates by 20% and then depreciates by 20% to come back to x - the red line is what actually is required - x appreciates by 20% and then only has to depreciate by 16% to go back to x.

So when Standard Bank says that the median price has depreciated 5%, this means that in fact that 5.25% of appreciation is wiped out. Larger drops wipe out even more - 10% depreciation wipes out 11% appreciation, 20% depreciation wipes out 25% appreciation and 30% depreciation wipes out 42% appreciation.