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Average House Prices Nearing R1m
Property 24
14 May 2007
Nominal house price growth of 15.5% year-on-year (y/y) was recorded in April from a revised 15.7% in March, according to the latest Absa House Price Index.
This brings the average price of a house in the survey to R911 800 in April 2007.
The researchers pointed out that nominal house price growth was 15.6% on average when compared with the same period last year in the first four months of the year.
In real terms, y/y growth of 9.1% was recorded in March compared with a revised growth rate of 9.4% in February, based on the headline consumer price index. In the first quarter of 2007, real growth in house prices was reported at an average of 9.2% y/y.
"On a month-on-month (m/m) basis, nominal price growth declined further to 0.9% in April after growth of 1.1% was recorded in March. House prices increased by 0.2% m/m in real terms in March (1.4% m/m in the preceding month)," said Absa researchers.
In their opinion, short-term risk for interest rates was on the upside, pointing to high fuel and food prices as concerns on the inflation front.
Absa's House Price Index growth in December 2006 was at just 13.5% and overall in 2006 it was at 15.2% from a whopping 22.7% in 2005. At the time Absa researchers said that growth in 2007 could be expected to continue the downward trend to 9% before improving again in 2008.
The Absa House Price Index is based on the total purchase price of houses in the 80sq m-400sq m size category, valued at R2.7m or less in 2006 (including improvements), in respect of which loan applications were approved by Absa. - Evan Pickworth
Original article published at www.property24.com.
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