House prices rise by 11.8%

By Drum Digital
08 April 2013

House prices in the middle segment of the market increased by 11.8 percent year-on-year in March 2013, according to the Absa House Price Index released on Monday.

The increase followed a revised 10.9 percent year-on-year rise in February, when real price growth was 4.8 percent year-on-year.

Absa property analyst Jacques du Toit said nominal year-on-year house price growth appeared to be peaking in some categories of the middle-segment.

The increase was influenced by market conditions and by a slowing in month-on-month growth in the past few months.

"Nominal price growth for the full year is forecast to be in single digits, with real price trends to be driven by a combination of nominal price movements and consumer price inflation," said Du Toit.

The average nominal value of middle-segment homes in March was: R752,600 for small homes (80 square metres to 140sq/m); R1.08 million for medium-sized homes (141sq/m to 220sq/m); and R1.61m for large homes (221sq/m to 400sq/m).

Du Toit said in the context of 2.7 percent real economic growth in 2013, and inflation forecast to average at six percent, interest rates were expected to remain at current levels throughout the year.

"Continued low interest rates will benefit housing and mortgage finance affordability," he said.

-by Sapa

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