PUBLISHED 4 DEC 2009
FNB reported this week that house prices showed positive growth in November, for the first time in almost a year.
Home loans strategist John Loos says the bank's House Price Index showed a year-on-year increase in prices of 2%, which put the market back in positive territory a month or two earlier than expected and bodes well for 2010.
Meanwhile the latest housing index compiled by Absa shows that the
average house price actually started rising in September (by 1,3%) and
that this was followed by a 2,6% rise in October.
"The November number is the continuation of an improving trend which
started in the form of diminishing house price deflation from around
June - a lagged response to gradually rising demand from early in the
year as interest rates began to fall," says Loos.
"And the improving demand and price situation makes for the likelihood
of a better year in 2010, with not only the rest of this year's
interest rate stimulus to feed through, but also increasing signs of
economic growth recovery. Real economic growth emerged from negative
territory to show a quarter-on-quarter annualised increase of 0,9 at
end-September."
He is still only cautiously optimistic, however, and anticipates that
house price inflation will stay in the single digits next year -
probably averaging 7 or 8 percent.
The average house price value for the month of November was measured by
FNB at R773 000. ABSA’s average middle segment house price currently
stands at R991 000.
Source: Property Trader
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