Township house prices surpass other areas
Houses in former black townships continue to outperform all other housing segments, according to the First National Bank (FNB) quarterly segment house price and market strength review released on Thursday.
Houses in these areas come off the lowest base though, said FNB home loan strategist John Loos.
The affordable area house price index followed by the middle income area index outperformed the high income and top end segments, he added in a statement.
Holiday towns continued to show a decline in house prices in the second quarter, compared with major metros which still showed some small positive house price growth.
Loos said full title properties outperformed sectional title.
“This we believe is partly due to better value for money in the full title segment ... again an affordability matter,” he said.
Smaller is better
For example, the average price of a three-bedroom full title home remains cheaper than a sectional title three-bedroom unit.
The best price growth was in small houses of 20 square metres to 80 square metres.
“Smaller is better not only from an average price point of view, but also from the point of view of lowering home running costs, which is crucial as municipalities and utilities pile on the rates and tariffs,” Loos said.
The weakest segment by far was the vacant land market.
“Small wonder, when the cost of building a new home is significantly more expensive than an existing home, and the household sector remains under significant financial pressure.”
Loos said the tough financial times had seen home buyers on a major affordability drives.
“The prospect of even tougher global economic times looming ahead suggests that it will be more of the same for the foreseeable future,” he added.—Sapa.