Johannesburg- Prospects for the housing market are dismal for the next few
years, the Rode Property Conference was told on Wednesday.
Property valuer and economist Erwin Rode said in his presentation that the housing market would be especially affected as consumers’ disposable incomes would remain under pressure for another few years.
Consumers will therefore be in no position to take on additional debt.
He also believes real house prices will decline a further 10% to 15% over the next five years. As far as nominal house prices are concerned, he expects growth of 2% a year for the next five years, assuming inflation of 5%.
According to the latest ooba house price index the average house price in July, at R821 579, was 3.4% down from R850 763 in July 2010.
But although house prices are currently under huge pressure, South African homeowners who have owned their homes for the past 15 years have experienced exceptional house price growth compared with those who have owned their dwellings for the past five years.
Houses in the affordable range, in particular, which Lightstone describes as properties worth less than R250 000, have shown strong growth of 495% over the past 15 years, Andrew Watt, executive director of Lightstone, said at the conference.
In contrast, these properties achieved growth of only 105% over the past five years. They exclude properties in townships and are largely those in central urban areas.
Watt said despite the downturn in the housing market, prices in the affordable segment are currently 16% higher than they were this time last year.
Lightstone’s house price index differs from other indices in that it compares the price fetched by an existing home with that paid for it when it was bought the previous time.
Watt said an owner in Lightstone’s luxury segment (worth more than R1.5m) has experienced house price growth of 392% over the past 15 years, compared with 23% over the past five. In the high-value segment (R750 000 to R1.5m) growth of 346% was achieved over the past 15 years and 19% in the past five.
In the mid-value segment (R250 000 to R750 000) 342% growth was seen over the past 15 years compared with 32% over the past five.
Watt said that in Gauteng house prices had risen 315% over 15 years and 22% over five. In the Western Cape 410% growth was achieved over 15 years and 26% over five, while KwaZulu-Natal saw growth of 321% over 15 years and 22% over five.
“But the surprise is the Eastern Cape housing market, which is showing signs of significant improvement, with 477% growth over the past 15 years and 39% over the past five.”
Property valuer and economist Erwin Rode said in his presentation that the housing market would be especially affected as consumers’ disposable incomes would remain under pressure for another few years.
Consumers will therefore be in no position to take on additional debt.
He also believes real house prices will decline a further 10% to 15% over the next five years. As far as nominal house prices are concerned, he expects growth of 2% a year for the next five years, assuming inflation of 5%.
According to the latest ooba house price index the average house price in July, at R821 579, was 3.4% down from R850 763 in July 2010.
But although house prices are currently under huge pressure, South African homeowners who have owned their homes for the past 15 years have experienced exceptional house price growth compared with those who have owned their dwellings for the past five years.
Houses in the affordable range, in particular, which Lightstone describes as properties worth less than R250 000, have shown strong growth of 495% over the past 15 years, Andrew Watt, executive director of Lightstone, said at the conference.
In contrast, these properties achieved growth of only 105% over the past five years. They exclude properties in townships and are largely those in central urban areas.
Watt said despite the downturn in the housing market, prices in the affordable segment are currently 16% higher than they were this time last year.
Lightstone’s house price index differs from other indices in that it compares the price fetched by an existing home with that paid for it when it was bought the previous time.
Watt said an owner in Lightstone’s luxury segment (worth more than R1.5m) has experienced house price growth of 392% over the past 15 years, compared with 23% over the past five. In the high-value segment (R750 000 to R1.5m) growth of 346% was achieved over the past 15 years and 19% in the past five.
In the mid-value segment (R250 000 to R750 000) 342% growth was seen over the past 15 years compared with 32% over the past five.
Watt said that in Gauteng house prices had risen 315% over 15 years and 22% over five. In the Western Cape 410% growth was achieved over 15 years and 26% over five, while KwaZulu-Natal saw growth of 321% over 15 years and 22% over five.
“But the surprise is the Eastern Cape housing market, which is showing signs of significant improvement, with 477% growth over the past 15 years and 39% over the past five.”