|
House price growth a 12 year low
9 January 2009
Growth in SA house prices has slowed to its lowest rate in over a decade, and 2009's growth rate won't be any better. This is according to Absa's House Price Index for December 2008, released on 9 January 2009.
The middle segment (between 80m² and 400m²) of the property market recorded an average nominal annual price increase of 3.8%, the lowest growth rate recorded since 1992. In real (non-inflationary) terms, prices of middle-segment homes dropped 6.7% over the year to end-December 2008.
Jacques du Toit, a senior property analyst at Absa Home Loans, told Fin24.com that high interest rates and inflation have had a negative impact on both house prices and demand. Also, fewer people were able to buy or invest in property due to stricter lending criteria introduced by the National Credit Act, passed in mid-2007, he said. Du Toit did not see the situation improving this year: "Expect prices to drop by 2.5% in 2009," said Du Toit.
Despite an expected cut in interest rates and price inflation set to lower, the effects will not become evident in the property market until the end of 2009, he said. Buyers, he said, are in the best position: "It's a buyer's market - property is at a reasonable price and a decline is expected."
Du Toit reckons that the best time to buy property is in the second half of 2009 when prices are expected to bottom. In the report, he notes that prices are expected to improve from the beginning of 2010 onwards.
Ines Schumacher, www.fin24.com
|
