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Johannesburg - The residential property market is expected to continue to reflect developments on macroeconomic, household sector and interest rate fronts, said Absa Home Loans in its housing review.
Residential building activity contracted further in 2010, reflecting demand and supply conditions in respect of new housing.
Against this background, a significant improvement in the planning phase of new housing, reflected by building plans approved and the construction phase, reflected by the completion of new housing, was not expected in the near term, said Absa property analyst Jacques du Toit.
"Taking into account recent trends in house prices, as well as expectations with regard to the economy, nominal price growth of around 1.5% is forecast for 2011.
"Based on this forecast and a projected average consumer price inflation rate of between 4.5% and 5% this year, house prices are set to decline in real terms in 2011, after rising by 2.4% in 2010," he said.
The year-on-year growth in household mortgage advances, which improved only gradually in 2010 after bottoming in late 2009, was expected to continue to reflect conditions with regard to the economy, household finances, banks' lending criteria, interest rates and the residential property market.
As a result, growth in mortgage finance extended to the household sector might gradually rise during the course of the year, but was set to remain in single digits.
Projections of a growing economy - pencilled in at below 4% for 2011 - some increase in employment, household disposable income growth, and low interest rates, were factors expected to support the residential property market in 2011.
Residential building activity contracted further in 2010, reflecting demand and supply conditions in respect of new housing.
Against this background, a significant improvement in the planning phase of new housing, reflected by building plans approved and the construction phase, reflected by the completion of new housing, was not expected in the near term, said Absa property analyst Jacques du Toit.
"Taking into account recent trends in house prices, as well as expectations with regard to the economy, nominal price growth of around 1.5% is forecast for 2011.
"Based on this forecast and a projected average consumer price inflation rate of between 4.5% and 5% this year, house prices are set to decline in real terms in 2011, after rising by 2.4% in 2010," he said.
The year-on-year growth in household mortgage advances, which improved only gradually in 2010 after bottoming in late 2009, was expected to continue to reflect conditions with regard to the economy, household finances, banks' lending criteria, interest rates and the residential property market.
As a result, growth in mortgage finance extended to the household sector might gradually rise during the course of the year, but was set to remain in single digits.
Projections of a growing economy - pencilled in at below 4% for 2011 - some increase in employment, household disposable income growth, and low interest rates, were factors expected to support the residential property market in 2011.
