House price growth accelerates at the end of 2012

Marina Martinique is popular amongst property buyers.
The Jeffreys Bay property market showed some signs of life late last year, with local estate agents reporting an upturn in the number of properties sold.

December was a good month for some of the estate agencies, with Marina Martinique being popular amongst serious buyers.

Nationally, December 2012 saw year-on-year growth in the average value of homes in the middle segment of the South African housing market rising further.

This came on the back of slowing growth twelve months earlier in late 2011.

However, month-on-month price growth has been on a steady declining trend during the past few months, which is set to eventually impact year-on-year price growth.

These trends are according to the Absa house price indices, which are based on applications for mortgage finance received and approved by the bank in respect of middle-segment small, medium-sized and large homes.

In real terms prices dropped by 5,4 % in the first eleven months of last year, with real price deflation of 2,9 % evident in the corresponding period in 2011.

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The average nominal value of homes in each of the three middle-segment categories was as follows in December 2012:

• Small homes (80m²-140m²): R791 100
• Medium-sized homes (141m²-220 m²): R1 076 700
• Large homes (221m²-400m²): R1 559 000

The forecast is for the South African economy to grow by a real 2,8 % in 2013, after expanding by an estimated 2,5 % in 2012. The country’s economic performance will this year still be affected by global economic trends and domestic developments and conditions.

Headline consumer price inflation remained below the 6 % level up to late 2012, but some upward pressure was evident as a result of rising food prices, transport costs and property running costs.

However, Absa’s forecast is for inflation to remain below 6 % in 2013, with the result that interest rates are expected to stay at current levels in the next twelve months.

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