Standard Bank launches two house-price indices for buyers

Standard Bank’s home-services department has launched a provincial house-price index (PHPI) and regional house-price index (RHPI) as it aims to provide more data to potential home buyers.

The bank said it held the largest market share of home loans in SA.

The new indices would give potential home buyers insight into regional and provincial market trends.

Andrew van der Hoven, Standard Bank home-loans head, said the indices would supplement the national house price index (HPI), but would “break new ground by providing rich data” on trends underlying residential property movements in different regions and measuring the median prices of properties sold.

“The advantage of a median is that it is not unduly influenced by extreme values and outliers,” Van der Hoven said.

The PHPI would be released monthly and the RHPI quarterly while the national HPI would still be available monthly.

“We need to analyse lots of data to develop the granular insights needed for the regional index while there aren’t very many noticeable changes month to month, so we anticipate the regional index being available once per quarter,” Van der Hoven said.

Property was “one of the biggest and most daunting investment decisions for consumers and investors”.

“We support clients on every step of their property journey, assisting them to make sound, well-informed decisions based on the research we provide.

“That next step they take must be done with their eyes wide open so that they are assured that they are making the best decisions.”

The PHPI would measure price developments for residential properties sold in each province and financed by Standard Bank. This included market prices for residential properties being captured, the price of land being included in the price, in line with the gross acquisition concept, with prices also covering the acquisition cost of a property, but not transaction costs.

The PHPI differed from the national HPI in that while the former relied on market prices, the latter used the assessment value of properties. Standard Bank consumer economist Siphamandla Mkhwanazi said that the new indices would show a diverse performance of property prices.

“For instance, our research for May 2017 shows that a price recovery in Gauteng in the first few months of the year was largely driven by a robust performance in Tshwane, with firsttime buyer demand particularly strong,” Mkhwanazi said.