SA best housing market over long term

South Africa is the best performing housing market in the world over the longer term, latest figures from British news magazine The Economist reveal.

The magazine’s global house price index shows that SA house prices rose by a cumulative 418% over the past 12 years (1997 to 2009).

That far outstrips any of the other 20 housing markets tracked by the index. The next best performers were Australia, Britain and Spain with growth of 181%, 175% and 167% respectively over the same time.

The worst performing housing market over the 12-year period was Japan with total negative growth of -36%. Other countries that ranked at the bottom of the global house price performance stakes according to The Economist are Hong Kong (-20%), Singapore (-4%) and Switzerland (+28%).

It appears that SA is also one of only a few countries in the world where house prices are back to their 2008-peaks. The Economist notes that although house prices have already started to rise in seven out of the 20 countries tracked by its housing index, most of these markets are still below their 2008-peaks.

That trend is confirmed by figures from the S&P/Case-Shiller house price index, which shows that although US house prices rose 5,6% between April and December 2009, they were still down a hefty 30% from the peak reached in June 2006.

A similar albeit less pronounced trend can be seen in the UK. Data from Knight Frank show that Central London house prices were up 11,5% in January 2010 year-on-year (y/y). However, that is still 12% below the peak reached in the UK in March 2008.

The picture looks decidedly rosier for the SA housing market. Latest data from FNB show that the price of the average SA house accelerated to R764,912 in January 2010, which is 1,2% higher than the average price of R755,390 recorded at the height of the boom in 2008.

FNB’s data further indicates that average house prices are already up 9,7% from second quarter 2009 when the SA housing market hit rock bottom. At the time, prices reached a three-year low of R696 755. – Joan Muller

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