property woes continue
01 Jul 2008
The outlook for the residential property market remains bleak, the Standard Bank said when releasing its residential property gauge. The Standard Bank median house price was recorded at R550 000 in June 2008.
This is a contraction of 11.3 percent year-on-year when compared to the median house price of R620 000 in June 2007. The five month moving average growth rate in the median house price was 7.8 percent. "The broad trend within the South African residential property market is in line with the evolving and intensifying headwinds currently confronting the South African consumer," the Standard Bank said.
It noted that the SA Reserve Bank raised interest rates again at the June Monetary Policy Committee meeting. Interest rates were now up a cumulative 500 basis points since June 2006, the Standard Bank added. The monthly cost of servicing a mortgage was now 36 percent more than it was 24 months ago, the monthly cost of a mortgage of R500 000, financed at the prime interest rate over a period of 20 years, was R4992 two years ago.
Now the cost of financing the same mortgage is R6769, the Standard Bank said.