08 Dec.
House price growth slowing down.
Latest trends
House price growth appears to be slowing down again, as was the case earlier this year. This is based on the latest trends in the Absa house price indices for small, medium-sized and large homes in the middle-segment of the South African housing market for which the bank received and approved applications for mortgage finance (see explanatory notes).
The recent developments with regard to nominal house price growth came against the backdrop of slowing or declining price trends on a monthly basis in the various categories of housing over the past few months, which were expected to eventually lead to a slowdown in year-on-year price growth at a later stage.
Rising headline consumer price inflation, currently at 6% year-on-year (y/y), caused real house price deflation to continue unabatedly across all three segments of housing up to October this year. The average real price of middle-segment houses, calculated at constant 2008 prices, was in October as much as 13,6% below the peak of August 2007. This was caused by average nominal house price growth being below the average headline consumer price inflation rate during this period.
Average nominal house prices in the various segments were as follows in November 2011, with nominal and real price changes presented in the table on the next page:
- Small homes (80m²-141m²): R709 500
- Medium-sized homes (141m²-220m²): R1 007 100
- Large homes (221m²-400m²): R1 512 700. …
Read more at Absa Property Research
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