08 Jul.
Moderate growth in home values.
June 2011 saw moderate nominal year-on-year growth in home values in the middle segment of the South African housing market, after some price deflation occurred in recent months. This is according to the latest trends in the Absa house price indices, which are based on the average value of homes in the small, medium-sized and large categories of housing for which the bank approved mortgage finance (see explanatory notes).
Nominal price growth of just more than 1% was recorded on a year-on-year (y/y) basis in middle-segment housing in June this year, after prices were declining in the first five months of the year compared with the corresponding period in 2010. Base effects are believed to have played a role in the moderate June 2011 year-on-year growth, as price growth was tapering off twelve months ago. In real terms prices dropped by 4,4% y/y in May 2011, based on a consumer price inflation rate of 4,6% y/y in the month.
The value of small houses (80m²-141m²) was down by a nominal 6% y/y in June 2011. May saw a decline of 6,1% y/y after revision. The average price of a house in this category of the market was about R753 100 in June this year. In real terms the value of small houses dropped by 10,2% y/y in May.
In the category of medium-sized homes (141m²-220m²), the average price was up by a marginal 0,2% y/y in June 2011 after declining by a revised 0,3% y/y in May. In June the average price of a medium-sized house came to about R973 400. A real price decline of 4,7% y/y was recorded in the medium-sized category in May this year, unchanged from April.
The segment for large houses (221m²-400m²) saw nominal price growth of around 1% y/y in both May and June this year, with the average price of a house in this category of the market coming to R1 489 900 in June. In real terms prices in respect of large houses were down by 3,4% y/y in May. …
Read more at Absa Property Research
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