MONEYWEB: Jacques du Toit, a senior property analyst at Absa Home Loans is with us in the studio. You've got the numbers out for June. I want to ask you this - in Kay's statement that they issued today from ooba, it was stated that the average price of a property bought by a first-time buyer had dropped 5% to R521 000. That's a very high figure, R521 000, if you think about it. The repayments on that have got to be somewhere around R7 000 a month. You should be earning from R21 000 to R25 000 a month to be able to afford that, just off the top of my head. R25 000 a month before you can buy a house?

JACQUES DU TOIT: Ja, well, property prices have increased quite significantly in the last couple of years, and they haven't really come down on a wide front. So R520 000 is very much a ball-park figure at this stage. Sure.

MONEYWEB: The ooba guys say that prices have fallen for first-time homeowners by 5%; your figures show that prices are still up year-on-year - not by much.

JACQUES DU TOIT: Ja. Very low growth, 4% at this stage. But maybe our segment is a little bit broader. We look at smaller housing here, say from 80m² up to 400m², so it's a very wide range of properties that we take into account in our calculations.

MONEYWEB: But in real terms, after adjusting for inflation, house prices are now falling.

JACQUES DU TOIT: Ja. That is actually the main issue at this stage. From an investment point of view you are losing money in terms of what you paid a year or two ago.

MONEYWEB: Jacques, are you seeing distress? Are you seeing people who maybe took a punt on housing, because you can gear up, you can use the bank's money, which is all very well when prices go up - but when they go the other way you get into trouble.

JACQUES DU TOIT: For sure, Alec. I think it has definitely happened. People who bought property a year or two ago, I think they are feeling the pinch now. But guys who bought property five or ten years ago, even longer, I think they are still in the pound seats. Not a major problem on that specific front.

MONEYWEB: So 3.8% year on year, June this year to June last year - we're a long way from the 1985 situation?

JACQUES DU TOIT: For sure. In 1985 we saw in real terms property prices declining by 22%, a massive decline. But then one must also remember that inflation was round about 17% at that stage.

MONEYWEB: So if inflation goes higher do you think we could revisit the '85 scenario?

JACQUES DU TOIT: Not really. We do not expect inflation to go up to those levels, or interest rates going up to the levels of 25% again that we saw in 1985. Those factors had a major impact on the market.

MONEYWEB: But they are still going the wrong way at the moment.

JACQUES DU TOIT: Yes. We've come a long way from the 34%, 35% nominal growth we saw back in 2004.

MONEYWEB: Jacques du Toit, senior property analyst at Absa Home Loans, reiterating that it's time to tighten your seatbelts.

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