Free State house prices shine

Johannesburg - The Free State and Northern Cape housing markets performed slightly better in the third quarter of this year than those of the larger provinces.

A house price index compiled by First National Bank from Deeds Office data indicates that the Free State as a whole achieved annualised house price growth of 7.6% for the third quarter of this year.

If the Motheo area (Bloemfontein and surroundings) is excluded, the rural house price index increased by 9.7% on an annual basis, which reflects that this index is holding its head above water better than that for the province as a whole, states Albert Humphries, First National Bank's regional manager for the Free State and Northern Cape.

He says this also applies to the Northern Cape, where 9.4% annualised price growth took place for the province as a whole during the third quarter.

"If the Frances Baard area (Kimberley and surroundings) is excluded, the Northern Cape rural house price index was 12% up."

"It would appear that rural areas such as the Free State and the Northern Cape lag the cycle somewhat, behind the larger metropolitan regions, and therefore still seem to fare better.

"It is also possible that the splendid performance of resources in general - including metals, coal, oil and food prices - played a supportive role in the economy, and consequently for rural housing markets, up to a couple of months ago.

"Resources prices recently declined sharply as a result of the global situation, and this could mean that these regions will now face headwinds," he reckons.

He believes the housing markets in the two provinces will not remain unscathed and, like the rest of the national property market, will have to wait for further interest rate cuts before getting relief.

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