10 Jun.
Home values continued to decline in May.
The year-on-year growth in home values in the small, medium-sized and large categories of housing in South Africa for which Absa approved mortgage finance (see explanatory notes) remained under pressure in May 2011.
In the first five months of the year, house prices showed an average nominal decline in the small and medium-sized categories, while all three segments recorded real price declines up to April. The declining trend in real home values over the past few months is related to the slower nominal price growth, while the consumer price inflation rate has risen gradually during this period to a level of 4,2% in April.
In the category of small houses (80m²-141m²), prices dropped by a nominal 6,4% y/y in May this year (-4,7% y/y in April). The base effect of a strong upward trend in price growth in this segment of the market a year ago is having a significant impact on current year-on-year price growth. The average price of a small house came to about R755 400 in May. A real price decline of 8,6% y/y was recorded in the small-house category in April.
The average value of medium-sized homes (141m²-220m²) declined by 1,8% y/y in May 2011, after being 1,7% y/y lower in April. The price of a medium-sized house was around R955 500 in May this year. In real terms, home values in the medium-sized segment dropped by 5,7% y/y in April 2011.
The segment for large houses (221m²-400m²) saw nominal price growth of 1,8% y/y in May, down from 2% y/y in April. The average price of a large house came to R1 487 700 in May. A real price decline of 2,1% y/y occurred in the large segment in April. …
Read more at Absa Property Research
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