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There will be no quick turnaround for SA's housing market, Standard Bank said in its latest Residential Property Gauge.

"In spite of the economy emerging from recession in the third quarter of 2009, important drivers of household spending in the economy, such as the level of household income, debt and unemployment, do not point to a quick turnaround in the housing market," the bank's economist Johan Botha said in a statement.

The bank's property book for 2009 showed an average annual decline of 4.2 percent in the median house price, from -0.3 percent in 2008.

The smoothed data yielded a rate of contraction of 3.7 percent year-on-year in December 2009, followed by a decline of 2.9 percent year-on-year in January 2010.

"This brings the number of monthly declines to 20 consecutive months."

It was significant that median house prices over the last four months had indicated a steady, if slow, improvement in the property market.

"The smoothed growth rate for January shows that the value of the median residential properties financed by Standard Bank was R545 000.

"However, in real terms the decline in real house prices comes to approximately 9.3 percent year-on-year."

Botha said the monthly median values of Standard Bank's property book tended to be very volatile, but the smoothed values showed the rate of decline was diminishing. What was also of interest from the data was that over the last couple of months there had been a sizeable increase in the number of loans granted, without a doubt supported by the loosening of credit criteria announced at the beginning of September last year.

"Also encouraging, it appears that first time buyers are showing interest in the housing market, while the loosening of the loan-to-value restrictions is increasing the demand for lower priced properties."

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