Absa forecasts drop in house prices

PRETORIA – House prices, excluding the effect of inflation, were in line for a drop of about 6 per cent on average in South Africa this year, with a further decline of 3,3 per cent next year, Jacques du Toit, an Absa senior property analyst, said last week.

Market activity and both nominal and real house price growth were forecast to taper off further this year and into next year. Absa’s latest house price index, released on Thursday, shows that real house prices dropped by 6,3 per cent year on year in May, the fourth consecutive monthly decline and the biggest since April 1993, when it was minus 7,7 percent.Absa said the price of a middle-segment house, excluding the effect of inflation, had dropped by 5,6 per cent, or about N$36 000, since the end of last year.The bank said nominal house prices had remained virtually static during the first half of the year.Nominal year-on-year house price growth declined to only 3,8 per cent last month from 4,7 per cent in May, which was the lowest nominal year-on-year growth in house prices since September 1999, when it was 3,3 per cent.The average price of a middle-segment house was about N$965 500 by the middle of this year.Standard Bank reported last week that its median house price dropped by 11,3 per cent year on year last month to N$550 000 from June last year.The growth in its median house price has not been positive so far this year.The median price is a middle price for houses in Standard Bank’s home loans portfolio.Saul Geffen, the chief executive of bond originator saidthat its data showed that the average price of a property bought by first-time buyers had fallen from N$548 800 in June last year to N$521 600 last month.Business ReportAbsa’s latest house price index, released on Thursday, shows that real house prices dropped by 6,3 per cent year on year in May, the fourth consecutive monthly decline and the biggest since April 1993, when it was minus 7,7 percent.Absa said the price of a middle-segment house, excluding the effect of inflation, had dropped by 5,6 per cent, or about N$36 000, since the end of last year.The bank said nominal house prices had remained virtually static during the first half of the year.Nominal year-on-year house price growth declined to only 3,8 per cent last month from 4,7 per cent in May, which was the lowest nominal year-on-year growth in house prices since September 1999, when it was 3,3 per cent.The average price of a middle-segment house was about N$965 500 by the middle of this year.Standard Bank reported last week that its median house price dropped by 11,3 per cent year on year last month to N$550 000 from June last year.The growth in its median house price has not been positive so far this year.The median price is a middle price for houses in Standard Bank’s home loans portfolio.Saul Geffen, the chief executive of bond originator saidthat its data showed that the average price of a property bought by first-time buyers had fallen from N$548 800 in June last year to N$521 600 last month.Business Report