The Absa House Price Indices (up to August 2009) ‘indicates that year-on-year house price deflation in the middle segment of the South African housing market has turned the corner and is slowing down’.

Jacques du Toit, senior property analyst for Absa Home Loan, said in a report: ‘ Year-on-year price deflation in the South African housing market appears to have turned the corner and is slowing down, according to Absa’s calculations. On a month-on-month basis, house price deflation slowed down from April to June this year, with price inflation recorded in July and August. These month-on-month trends contributed to year-on-year price deflation tapering off in the past two months.’

Middle-segment house prices were down by -3.4% year-on-year (y/y) in August 2009. On a month-on-month basis, prices were up by a nominal +0.2% in August, after a marginal increase of +0.03% was recorded in July. In real terms, prices were down by -9.7% y/y in July this year, after declining by -10% y/y in June.

The South African economy is in recession after contracting for three consecutive quarters up to the second quarter of 2009. However, there are indications that the global economy may be on the path to recovery, with the economy expected to start to recover late this year.