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Johannesburg - Although Lightstone's National
Repeat Sales house price inflation is still slightly negative year on year,
it appears that the House Price Index bottomed out at the beginning of 2009
and that house prices are actually now on a modest upward trend, according
to the latest Lightstone house price index released on Wednesday.
The report showed that monthly house price inflation (which tracks the
month on month house price trend) was up 0.24% from March to April.
"This continues the positive trend we have been monitoring since
January and appears to confirm that recent house price growth has moved out
of negative into modest positive territory," said Lightstone.
"Given the volatility of monthly house price inflation, we have been
cautious to confirm this positive trend, but four consecutive months of
positive monthly figures gives us the confidence to confirm that house price
are on the rise again."
Projecting forward to July, annual house price inflation is now
effectively at 0%, which suggests that we have avoided the major house price
drops experienced in foreign markets, said Lightstone.
It noted that nevertheless while the "normal" market appeared to be
recovering, there was still evidence of major house price pressure in
distressed circumstances.
The average discounts in the case of forced sales have increased from
15-45% at the beginning of the year to 25-50% currently.
With mortgage lenders having mostly accounted for their bad debt
exposure and interest rates falling, there are signals that the appetite for
lending is increasing which should stimulate both the "normal" and
"distressed" markets.
Hopefully the distressed discounts are also near their maximum. In fact,
at the lower end of the market, the discounts are actually now decreasing,
Lightstone said.
On a segment level, the Affordable and Mid Value segments are both
showing positive annual inflation this month, with the Affordable market
reaching highest inflation numbers across all segments at 17%.
Even in the Luxury and High Value segments, which are still negative
year on year, the trend is upward.
- I-Net Bridge