The Standard Bank house price index was up 10.3% in May compared with the same period a year ago‚ from 9.8% year on year (y/y) in April.

The bright spot from a credit perspective remains the prevailing accommodative monetary policy environment.

“At its most recent meeting‚ the South African Reserve Bank’s MPC (Monetary Policy Committee) opted to keep the benchmark repo rate unchanged.

We anticipate a continuation of this accommodation‚ and have priced in a 50 basis-point rate cut in the first quarter of 2014 as we anticipate the bias in the prevailing ‘stagflation-lite’ scenario to lean towards receding inflation as opposed to improving economic growth‚” the bank said in a statement.

Despite favourable interest rates‚ elevated pre-existing household indebtedness as well as tarnished credit records remain key stumbling blocks to a notably improved uptake in household mortgages‚ Standard Bank said.

The nominal index growth for freehold properties recorded an 11.9% y/y improvement in May from 11.2% y/y in April‚ while the improvement in the nominal index pertaining to sectional title units eased fractionally‚ recording 5.8% y/y in May from 5.9% y/y in the prior month.