House prices increased by 22,5% for the 12 months to May this year, with the average home costing R678 800, Absa said on Thursday.
”According to the latest Absa house-price index, nominal year-on-year growth of 22,5% in house prices was recorded in May 2005, compared with a revised growth rate of 24,6% in April this year,” Absa economist Jacques du Toit said in a statement.
”This brought the average nominal price of a house in the so-called middle segment of the market to about R678 800 in May.”
Du Toit said the average year-on-year growth in house prices in the period January to May 2005 was 26,6%.
Year-on-year growth of 20,5% was recorded in April, compared with 23% in March.
The average growth in house prices during January to April was 23,9%.
Du Toit said based on current interest rates and average house prices, the monthly mortgage repayment and the qualifying gross monthly income were 14,7% higher in May 2005 than in May 2004.
”Housing is still less affordable than a year ago, but the 2004 trend during which housing became increasingly unaffordable has turned around in early 2005,” Du Toit said.
He said on a month-on-month basis, the affordability of housing had improved from April to May, with the average monthly mortgage repayment and the qualifying gross monthly income declining by 0,9% during May, compared with April.
”This was mainly the result of slower growth in house prices in May, as well as slightly lower interest rates since mid-April.”
Du Toit said Absa predicts growth in house prices of between 15% and 20% for 2005, compared with growth of about 32% in 2004. — Sapa