Average house to reach R1m

Johannesburg - In the past two months house prices have picked up to such an extent that Absa's average house price will soon break through the R1m mark.

This average is currently R991 225, after nominal house prices in the middle segment of the market (80m² to 400m²) were 2.6% higher in October than at the same time last year, according to Absa's latest house-price index. The revised growth figure for September was 1.3%.

This is the highest average price of a house to date and, if the current growth trends in the middle segment of the market persist, there is a good chance that the average could soon exceed R1m, says Jacques du Toit, senior property analyst at Absa's home loan division.

The previous peak was R969 130 in May 2008, and the turnaround came in April this year when the average price was R935 038.

Du Toit warns that the soaring double-digit growth previously experienced is something of the past and he expects moderate growth in the property market in future.

"Although the current 2.6% growth is good news after many months of falling prices, it is light years away from the previous high of 35.7% in October 2004." The all-time high was in May 1981, when house prices shot up 41.5%.

He says the latest house-price trends are encouraging and transaction volumes in October were up on those in September.

Despite massive unemployment figures, in terms of which a million people lost their jobs in the first nine months of this year, he says several economic indicators suggest that the economy is on the road to recovery.

- Sake24.com

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