Stellenbosch – Inflation adjusted house prices in South Africa are still very expensive, according to property analyst Erwin Rode.
"The South African residential property market did not see the correction the US had after the financial crisis. I think, should things really go awry in SA, house prices will in real terms drop to a more sustainable level – more or less to the inflation-adjusted level of 1985 or thereabouts," Rode said at the annual property conference hosted by Rode & Associates on the Spier Wine Estate outside Stellenbosch.
"Because house prices are still so high and the supply side still relatively strong, our models forecast house prices in real terms will come down over next few years." He gave as an example sustained inflation of 6% and nominal prices growing at 3%.