It’s not only in the car market where the bottom part is suffering most due to the recession.
The housing market in SA’s most important townships, where prices showed the best countrywide growth at one stage, is now faring much worse than the residential markets in metropolitan areas.
In Q4 2009 house prices in townships were 6,6% lower than during the same quarter in 2008 and 2,9% lower than during Q3 2009, FNB’s Township House Price Index showed.
The index is based on transactions lodged at the Deeds Office.
This means that the value of the average house in a township had decreased to R250,255 during this quarter from R268 021 in Q4 2008.
The price of an average house in the metro areas was 0,5% lower than during the same quarter in the previous year and 0,1% better than in Q3.
The average price of a house in the metro area was R856,060 in Q4 2009.
John Loos, property analyst at FNB, says the weak performance of the housing market in the townships is in stark contrast to a few years ago when this market achieved growth of 38,1% in Q4 2006.
This growth is due to the normalisation of the township market over the past decade, during which the sentiment towards these areas became positive.
He attributes the turnaround to the recession, especially the job losses in the mining and manufacturing industries.
He says the government’s strong focus on the market for affordable houses is good news. “However, direct measures by the government and banks have a limited effect on the affordable housing segment.”
He says a sustainable solution is strong economic growth leading to job creation. – Sake24
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