While there are a range of factors at play which are currently affecting the residential property market in South Africa there is no need for widespread panic, says Dr Andrew Golding, CE of the Pam Golding Property group. These include global economic factors, national and political issues, a less positive sentiment, interest rates and the National Credit Act.

"There is much speculation in regard to the current situation in the residential property market, and unfortunately generalisations being bandied about in the marketplace in regard to house prices are dangerous. The fact is it's not a 'one size fits all' scenario and there is no question that sales volumes have declined by some 20-30 percent year on year with an inevitable impact on house prices. However, the residential property market is sufficiently robust to deal with the changing dynamics and will continue to provide a reliable mechanism for the buying and selling of properties, albeit at lower volumes.  Prices will adjust in line with supply and demand but fundamentally there are still valid reasons for residential homes to trade and there is certainly no need for panic selling, in fact quite the contrary.

"It's true that genuine sellers need to be realistic about where the market is right now, and if you as a seller are looking for a premium price above market in the current situation you will be fortunate to achieve this. However, having said that, and while there are instances where properties are selling some 20 percent below asking price, the residential property market around the country comprises a broad mix of areas where values are still appreciating, holding steady or remaining flat, or declining. Despite some conjecture to the contrary, there are also widespread instances where the financial institutions are finding sound value in properties.

"We are currently in a consolidating market and while there is a contraction the reality is not as gloomy as is presently being portrayed in some of the commentary - which serves to only further dampen sentiment. Market sentiment is also not helped by the fact that speculation is rife in regard to a possible two percent hike in the repo rate, which would certainly lead to already over-stressed consumers with reduced disposable income further struggling to afford either their bond on an existing home or acquiring a home. There is no doubt that any further interest rate increases will adversely impact demand and increase the potential for distressed selling - an unfortunate combination that will likely lead to downward price adjustments and a slower market.

"Having in recent years enjoyed exceptional boom times with unprecedented growth in property values, it was inevitable that property price growth would slow. We are not in a recession and inherently the economy is still growing and the residential property market - particularly the middle class sector - is characterised by an under supply and over demand.

"Regrettably affordability is an issue in regard to some sellers. However if you are not compelled to sell right now it is far better to sit it out for a while. We anticipate that the market is likely to experience the current conditions for the next 12-18 months before alleviating to some degree and then commencing into an upward cycle," says Dr Golding.