18 Feb 2013
The Absa House Price Index has revealed that year-on-year (y/y) growth in the average value of homes in the middle segment of the South African housing market continued in January 2013.
According to the report, the upward trend in y/y price growth occurred against the background of the base effect of slowing house price growth and even price deflation in some segments twelve months ago.
On a monthly basis, price growth continued to slow down, which is expected to show up in a moderation in annual price growth during the course of the year, reveals the report.
Writing in the report, Jacques du Toit, Absa Home Loans property analyst, says the middle segment house price growth came to 9.1 percent y/y in January this year, from 7.4 percent y/y in December.
Real price growth of 1.7 percent y/y was recorded in the last month of 2012.
Du Toit says the average nominal value small homes measuring between 80 and 140 square metres was R789 400, medium-sized homes (141 to 220 square metres) was R1 077 700 and large homes (221 to 400 square metres) was R1 592 800.
Du Toit says nominal house price growth is expected to remain in single digits in 2013, based on current trends in and the outlook for key macroeconomic indicators, household finances and consumer confidence.
“Real price growth will remain under pressure in view of consumer price inflation forecast to average around 6 percent this year,” he says.
Meanwhile, data from ooba reveal that the average house price was R894 510 in January 2013, up 5.2 percent from R850 589 in January 2012.
Month on month, the average house price increased 3.4 percent from R865 164 in December 2012.
“The property market is gaining confidence and we expect property prices will continue to show positive nominal price growth for the year ahead,” says Rhys Dyer, ooba chief operating officer.
Bradley Stephens, director at Aucor Property believes the residential property market looks positive and points to y/y growth in middle segment house prices increased to 9.1 percent in January, according to Absa.
Stephens explains that while this growth is expected to moderate during the year, property prices will remain relatively stable in the major metropolitan regions of Johannesburg, Pretoria, Durban and Cape Town.
“This is in stark contrast to other regions in the world where price deflation still persists and the property market still hasn't seen the bottom of the downturn.”
Stephens says some sellers can also expect to see returns on their investments in 2013, as house prices in key coastal areas such as the Atlantic seaboard and KwaZulu-Natal North Coast continue to buck the trend.
“Couple this with the fact that record low interest rates should remain stable at this level throughout 2013, and we have an environment where both buyers and sellers can benefit,” he says.
He says sellers and investors will still see returns if they are realistic about the value of their properties and choose the right sales channels to divest noting that it remains a buyer’s market.
“If investors have access to finance or the liquidity, and are willing and able to hold on to properties over the long-term, then there are great opportunities out there,” he adds. – Denise Mhlanga
About the Author
Townhouse for sale in Del Judor & Ext R 830 000
House for sale in Dennemere R 450 000
House for sale in Montana R 3 200 000
House for sale in Sonlandpark R 890 000
Vacant Land / Plot for sale in Paarl West R 788 000
Vacant Land / Plot for sale in Witsand R 1 200 000
Apartment / Flat for sale in Faerie Glen R 1 100 000
House for sale in Westview R 695 000
Apartment / Flat for sale in Groblerpark R 600 000
Apartment / Flat for sale in Groblerpark R 575 000
If you are using Internet Explorer 8 or higher, please verify that your Internet Explorer compatibility view settings are not enabled.
For the best browsing experience, update to the latest Version of Internet Explorer or try out Google Chrome or Mozilla Firefox.
Please contact our Property24 Support Team for further assistance. Tel. +27 (0)861 111 724