All data is delayed
See More

House prices cheaper than in 2007 - Absa

Jan 12 2012 09:43

Johannesburg - The average price of a mid-segment house was almost 14% lower in November last year than it was in August 2007, according to Absa's latest property price indices released on Thursday.

"The average real price of middle-segment houses, calculated at constant 2008 prices, was in November almost 14% below its peak of August 2007," Absa Home Loans property analyst Jacques du Toit said in a statement.

"(This) was the result of average nominal house price growth being below the average headline consumer price inflation rate over the past four-and-a-half years."

Nominal house price growth - where the effects of inflation are not taken into account - in the middle segment of the South African housing market was 2.2% in 2011.

This was down from growth of 7.3% in 2010.

In real terms, when average annual inflation of 5% was factored in, house prices deflated by 2.7% in 2011.

The average nominal house price of small homes (80m² to 141m²) in December 2011 was R694 400, Du Toit said.

Medium-sized houses (141m² to 220m²) registered an average nominal house price of R985 400.

The average nominal house price of large homes (221m² to 400m²) was R1 548 200 in December.

Unchanged interest rates in 2011, rising inflation, relatively high levels of debt, damaged credit records and tight labour market conditions all played a role in dampening house price growth and demand for housing.

Du Toit said house price growth would probably remain subdued in 2012.

"Based on the outlook for the global economy and domestic growth, inflation, interest rates and the consumer sector, house price growth is forecast to remain relatively low this year, while prices are set to decline further in real terms," he said.

The trends are based on the Absa house price indices for small, medium-sized and large homes in the middle segment of the housing market for which the bank received and approved applications for mortgage finance.

property  |  house prices


Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


With infrastructure spending having been identified as one of the key focus areas of the National Development Plan, tradesmen will continue to play a critical role in growing the South African economy through their skills..

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

A 30% a month return on investment is:

Previous results · Suggest a vote