Absa House Price Index shows that house prices in the middle segment of the market increased by 11.8 percent year-on-year in March 2013
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, so this is a very encouraging trend however 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.
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).
ABSA said that 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, and that continued low interest rates will benefit housing and mortgage finance affordability.