House prices in SA’s metro areas were firmer in the first quarter (Q1) of 2010 than during the same time last year.

This follows after the housing market started recovering markedly in 2010’s third quarter (Q3).

House prices were especially buoyant in Port Elizabeth, Durban and Bloemfontein, according to Absa’s latest quarterly report on residential property.

In Port Elizabeth and Uitenhage prices were 23,7% higher in the first three months of the year than during the corresponding period last year. This brought the average house price to R982,233, compared to R794,184 in Q1 of last year.

However, this growth comes off a low base as house prices fell by 11% in Q1 2009.

Jacques du Toit, senior property analyst at Absa’s home loans division, says it has to be borne in mind that it is the average value of properties in the middle segment of the market (80sqm to 400sqm) for which Absa had granted home loans. “It doesn’t necessarily reflect general market trends.”

He says the strong price growth relates to the recovery of the Eastern Cape’s manufacturing sector, especially the motor industry. He says every metro is area-specific with different factors playing a role in market trends.

The Eastern Cape’s economy will also benefit from Ford investing some R1,5bn in its Struandale diesel plant in Port Elizabeth. Du Toit says this will boost employment and income growth in the province, which will filter through to the housing market in a positive manner.

However, this growth is contrasted by the situation in East London, where house prices are 5,7% higher in Q1 2010 than in the same period last year. He says house price growth in this metro was more stable over the last year and it was the only metro in positive growth territory during Q1 2010 with growth of 3%.

Louis van Niekerk, Pam Golding Properties’ (PGP) area manager for Port Elizabeth, says sales volumes showed a good upturn during the first three months of 2010. He says the strong growth is also the result of more transactions at the more expensive side of the market.

He says the most activity is currently happening in the segment under R1,8m.

House prices in Bloemfontein increased by 15,5% year-on-year (y/y) in Q1 2010.

Du Toit ascribes this to supply and demand conditions in a fairly small market. He says a couple of big transactions could have had a favourable influence on prices.

House prices in the Durban/Pinetown were 15% higher in Q1 2010 than in Q1 2009.

Du Toit says area-specific factors are again the causes, with Durban being linked to a wide range of industries, including the automobile sector.

Tomi Svorinic from Lew Geffen Sotheby’s International Realty in Pinetown says sales in Pinetown are buzzing.

He says it is linked to the banks relaxing their lending criteria and again granting 100% loans to prospective buyers who qualify.

“It has helped our market, which consists mainly of first-time buyers, significantly.”

The metro area with the highest average house price in the middle segment of the market is Johannesburg North and West.

In Q1 2010 house price growth of 10,7% was measured there, with the average house price being R1,401,639. – Elma Kloppers, Sake24

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