Simon’s Town Real Estate News

SA coastal property prices up 12,8%

South African coastal property inflation rose by 12,8% year-on-year (y/y) in May this year from 11,9% in April, the Lightstone Coastal Price Index released on Friday showed.

The index includes all repeat property transactions on property within 500 metres from the coastline.

At the same time, the Non-Coastal Index inflated by 18,8% in May from 19,1% in April.

“The lower coastal belt inflation rate, compared to the non-coastal index, is seen as a reflection of the greater cyclicality of strongly holiday property-driven markets, with potential buyers more easily being able to hold back in adverse times such as an interest rate hiking period,” Lightstone said.

It said the lower rate of inflation for some time was arguably a “necessary evil”, following a boom period that eroded affordability.

“However, the narrowing of the price inflation gap between the two indices, with coastal price inflation rising, suggests that the ’shake-out’ in the coastal market may be drawing slowly to a close, although one mustn’t dismiss the possibility of further relative weakening in the figures for the second half of 2007, remembering of course the impact of both further interest rate hikes as well as the National Credit Act (NCA) implementation,” Lightstone said. – I-Net Bridge

Tags: Inflation, simons town property trend