John Loos, property strategist at FNB Home Loans said that estate agents estimated a decline in the percentage of sellers selling their homes in order to downscale due to financial pressure, from 25% in the previous quarter to 19%.

He said that this could be the start of results from the long process of household debt-to-income reduction, and other measures aimed at rebuilding balance sheets, coming through.

"It is too early to tell though, and another few data points will be required. But we do know from SARB (South African Reserve Bank) data that the decline in the household debt-to-disposable income ratio, and thus the debt-service ratio, continues."

The third quarter survey, undertaken in August, points towards a slight increase in residential demand, and some mild improvement in estate agent confidence, but it's not a market with any strong direction.

When asked to rate residential demand in their areas, on a scale of one to 10, the agent panel put the average estimate at 5.86, which falls on the higher end of the "stable" activity range which is between four and six. This demand reading is slightly up on the 5.61 level of the previous quarter, and is also 3.7% higher than the third quarter 2010 reading.

"In the context of past changes, 3.7% year-on-year increase is very small, and could probably better be termed a 'stabilization' in demand."

Nevertheless, Loos said this slight improvement was surprising, as the third quarter survey reading had always been weaker than the second quarter reading since the inception of the FNB Estate Agent Survey, and this at a time when there had been no further interest rate cutting since late-2010 and SA's economy had recently come under increased pressure.

"Yet while agents point to a slight demand improvement, they do not indicate any further improvement in pricing realism, or otherwise put in the balance between demand and supply."

The estimate average time that a house remains on the market before being sold rose from 15 weeks and 1 day in the previous quarter to 17 weeks and 1 day in the third quarter survey. Simultaneously, the percentage of sellers having to drop their asking price to make the sale rose still further from 87% previous to 91%, and the average percentage drop increased from 11% to 13%.

"So, while agents point to a slightly better residential demand, they don't indicate an improvement in the balance of demand relative to supply, which would suggest that house price growth is set to remain under pressure."

"We believe, therefore, that while the latest Estate Agent Survey demand reading is mildly encouraging, not too much should be read into it yet. Only after another few quarters' surveys will we be able to see whether a sustainable 'market stabilization' is setting in. In this regard, much will depend on the future state of the global and local economy."