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Johannesburg - The growth in house prices in holiday towns stabilised to 1.7% in the second quarter of 2013, according to the FNB holiday town house price index.
The rate was up from the previous quarter's 1.1% and reflected some "nominal improvement", First National Bank household and consumer strategist John Loos said in a statement on Monday.
"But in real terms, adjusted for consumer price inflation, it still reflects a decline, with consumer price inflation hovering at a significantly higher rate around 5.5%."
He said that in real terms, the estimated "downward correction" in prices since the peak of real prices as at the last quarter of 2007 had been a cumulative -27.5%.
By comparison, the drop in real prices in the major metro house price index had been -14.7%.
"However, this does not tell the full story regarding relative price levels of the two markets, because it was the holiday town markets that rose more strongly back in the boom times than did the major metro markets," he said.
"Therefore, examining price movements since pre-boom days, it is possible that, cumulatively, holiday town price performance still outdoes major metros since the late-1990s, albeit only by a very slight margin now."
Loos said while it was encouraging for property owners in holiday markets to see "nominal" growth, the FNB estate agent survey pointed out that holiday home buying was moderate, and primary residential demand was "king".
"For the foreseeable future, we would expect the major city markets to continue to outperform the holiday town markets."
