South African median house prices fell by 13.2% year-on-year in May, with new tougher credit laws and high interest rates cutting demand, a survey showed on Monday.
A median is the middle point between the highest and lowest figures.
Sponsors Standard Bank said the decline in prices may have been overstated by high base effects due to abnormally high activity during the same month last year, but the downward trend still showed declining affordability on high interest rates.
03 June 2008
Standard Bank: Median Property Price Down 13.2% Y/Y - Dropped 8% In Two Months!
Back in April Standard Bank reported the median price drop was 5.5% year over year. Now they have reported that year over year the median has dropped 13.2% which means that in a little over two months the median price has dropped another 8%! That has got to hurt!
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If you look at the June 07 Median figure it was R30,000 higher than the May 07 figure. So I am pretty sure the June 08 year on year decrease will be -17% to -18% ... ie 29% real.
The present Median is the same as it was 2 years ago in mid 06. Interestingly, a woman posted in Moneyweb and said she bought a house recently in jo'burg at a 33% discount from asking price, which also was the price of the house back in mid 06. Maybe there's a pattern here and we are back to mid 06 prices.
The -13% also matches Lew Geffen who said that on the ground he reckoned prices were -10 to -15% down.
The Absa index meanwhile is in cloud cuckoo land but my experiments with their pricing set up show that it doesn't actually reflect price drops properly so it needs to be ignored.
So the crash is well and truly underway - I'd say our work here is almost done CT !!!
The gap between ABSA and Standard Bank gets me worried. Surely there are standard ways to measure price appreciation. With each bank doing it their own way there's a whole lot of mixed signals.
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