Jacques du Toit, Senior Property Analyst, Absa Home Loans, is forecasting the residential property market to bottom around mid-2009 and to gradually recover in the second half of the year on the back of lower inflation and interest rates and somewhat better economic conditions.

However, he notes in his reaction to yesterday’s 100 basis point cut by the MPC, levels of activity in the housing market are expected to remain relatively subdued in the first half of the year, while house prices are projected to drop by 2,5% in nominal terms and by 8% in real terms.

Du Toit expects the housing market to only show a noticeable improvement in 2010 and beyond.