House Prices Growth Decline Further
Oct 6th, 2007 by Johan
According to the latest Absa house price index, the average house price in the middle segment of the market increased a nominal 14,2% year on year to R950000 last month.
- A fairly expensive property market caused demand to drop off, which in turn led to a gradual decline in the rate of house price growth.
- Absa senior economist Jacques du Toit said yesterday the drivers of this downward trend were “tightening economic conditions, higher debt levels” and the effects of the National Credit Act.
- He said that based on the first nine months of this year, the bank was forecasting nominal house price growth of 14,5% for the full year.
- “We believe the Reserve Bank will leave rates unchanged. There are signs that overall demand in the economy is slowing and that growth in credit extension is also tapering off.
- Property economist Francois Viruly, of Viruly Consulting, said that the residential market priced up to R700 000 was driving the residential market at the moment.
- “We are going to start to see more rental increases. People are being pushed into the rental market, and the buy-to-let market is going to start performing much better in the next 12 months,” he said.
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