Standard Bank's most recent Residential property gauge has been published; it runs to 20 pages and makes interesting reading. Its main finding is that house price growth is still strong (24.5% in May 2005), but slowing. The proviso to this figure is that it masks material differences across price categories and regions. For example, property prices in the middle ranges have been boosted by sectional title developments, thereby outpacing the growth in other price bands.
The residential property market continues to be lively, being underpinned by healthy consumer fundamentals, low interest rates and generous gains in disposable income on the back of accelerating economic growth and consecutive cuts in income taxes. But it is decelerating as a result of a combination of factors, including recent above-trend growth; the reduction in pent-up demand after several years of brisk buying; and the fading impact of previous interest rate cuts.
Because so many people have such a vested interest in the residential property market this report's value lies in its in-depth analysis. It analyses prices not only at the national level but also for different price bands and different regions. Of use is the positing of the housing market within the broader economic context.
A couple of points are worth emphasising:
- The data used comes from the most reliable source - the Deeds Office.
- The analysis relates to median house prices as they give a more accurate reflection than average house prices.
- Different price categories are analysed while house prices in metropolitan and non-metropolitan areas are compared.
- An analysis of the drivers of house prices looks at the three main drivers: the role of investors in the property market; the macroeconomic setting and the affordability of houses to households.