On a two quarter moving average basis, the estimated percentage of properties sold at below asking price showed a further decline from 79 percent in the second quarter to 75 percent in the third quarter, while the average time of a property on the market prior to being sold declined only marginally from 16 weeks and six days in the second quarter to 16 weeks and three days in the third. These two indicators, when read together, point towards more realistic pricing by sellers, most notably the general decline in those properties sold at below asking price since the 94 percent of the third quarter of 2003.

The greater realism may not only be due to sellers setting prices lower, but also due to the market catching up to price levels, therefore making previously unrealistic price levels now a little more realistic in a stronger market.

Selling in order to downscale due to financial pressure remained high although fairly stable, slightly higher at 26 percent of total selling in the third quarter from 25 percent in the second quarter of 2009 (on a two quarter moving average basis).

Simultaneously, selling in order to upgrade showed a marginal improvement from four percent to six percent from quarter to quarter, which remains low in comparison to levels near to 16 percent as at the beginning of 2008.

Thus, although the demand side of the market has strengthened, it is clear that the household sector in Port Elizabeth remains under pressure for the time being.

As a percentage of total selling, emigration selling in Port Elizabeth showed a surge during 2008, similar to the trend in other metros, but never reached as high a level as the likes of the Gauteng metros or eThekwini. After a peak of 14 percent in the fourth quarter of 2008, there has been a broad decline in emigration selling?s significance to only seven percent of total selling by the third quarter of this year, according to the estate agents surveyed.

Teetering on the brink of price deflation

On a year-on-year basis, the Nelson Mandela Bay Metro clung on to slight house price inflation of 0.5 percent. However, on a quarter-on-quarter basis the rate returned to deflation of -0.1 percent, indicating that as at the second quarter the momentum in prices had not yet turned upward.

Interpretation/Conclusion on page three...