House price growth slumps

Johannesburg - Growth in house prices in the middle segment of the market decreased by 0.6 percent for May 2013, according to the Absa House Price Index released on Monday.

In May 2013, the middle-segment nominal house price growth fell to 11.1% year-on-year from a revised growth rate of 11.7% year-on-year in April 2013.

Jacques du Toit, property analyst at Absa, said the decline in house price growth was a result of base effects and a downward trend in monthly price growth since mid-2012.

This, he said, was expected to eventually cause year-on-year price growth to moderate.

"On the back of the latest trends in house price growth and various factors impacting the housing market, single-digit nominal year-on-year price growth is forecast for the full year," he said.

Du Toit said real house price growth would continue to be driven by a combination of movements in nominal prices and consumer price inflation.