A quick recovery in the housing market is decidedly unlikely, according to Standard Bank’s latest residential property report, as prices decreased again in April.

The Standard Bank (smoothed) median house price index decreased by 2.5% year-on-year in April, following average declines of nearly 2.5% year-on-year in the first three months of the year.

“The overall state of the economy early in 2009 and the medium-term outlook are such that a marked and quick improvement in the housing market is decidedly unlikely,” said Standard Bank.

Standard Bank said the trend cycle of the April residential property data has confirmed that the weakness in the property market is set to continue for longer, but added prices are expected to bottom out by the end of the year.

“It is anticipated that house price growth will be negative over the short- and medium term, but likely to bottom out towards the end of the year as the impact of interest rate cuts filter through the economy and the property market,” said the bank.

Standard Bank also noted that it foresees another 150 basis points cut for the rest of the year, which would see interest rates back at their mid-2006 level, before the Reserve Bank hiked rates by 500 basis points.