The five-month moving average growth rate of the Standard Bank median house price slowed to 3,25% in February, the lowest it has been since October 2000.

This softening trend, the bank notes in its March 3 Residential Property Gauge, characterises the waning consumer fundamentals, especially more expensive debt, alongside slower real income growth.

The Standard Bank median house price1 index was recorded at R570 000 for the month of February. When compared to the same month last year there was no growth in residential property prices.

If one excludes the National Credit Act (NCA)-induced outlier of R620 000 recorded in June 2007, the monthly Standard Bank median house price has been range bound between R550 000 and R599 000 since December 2006.

“The rigidity of the median house price in this range, the stagnation of house price growth and the lower demand for housing the gauge says, highlight the headwinds facing residential property.

“This weakness concurs with the anecdotal evidence of sellers revising their price expectations downward and of houses remaining on the market for longer periods. However, the median house price also hides some interesting dynamics between different price bands. There has been a downward shift in the lower quartile house price on our mortgage book and an upward shift in the upper quartile house price.

“The lower quartile is the value below which 25% of the sample data lie and the upper quartile is the value above which the upper 25% of the sample data lie. The lower quartile house price on our mortgage book was R350 000 in February 2007, and declined to R300 000 in February 2008. The upper quartile house price increased from R880 000 in February 2007 to R960,000 in February 2008 with the median house price remaining intact at R570,000. A similar trend was evident when comparing the quartiles for January 2007 and January 2008.