Nominal house-price growth of 15,5% year-on-year was recorded in April from a revised 15,7% in March, according to the latest Absa house-price index. This brings the average price of a house in the survey to R911Â 800 in April.
The researchers pointed out that nominal house price growth was 15,6% on average when compared with the same period last year in the first four months of the year.
In real terms, year-on-year growth of 9,1% was recorded in March compared with a revised growth rate of 9,4% in February, based on the headline consumer price index. In the first quarter of 2007, real growth in house prices was reported at an average of 9,2%.
“On a month-on-month basis, nominal price growth declined further to 0,9% in April after growth of 1,1% was recorded in March. House prices increased by 0,2% in real terms in March (1,4% in the preceding month),” said the Absa researchers.
They stated that, in their opinion, short-term risk for interest rates was on the upside, pointing to high fuel and food prices as concerns on the inflation front.
The Absa house-price index growth in December last year was at just 13,5%, and overall in 2006 it was at 15,2% from a whopping 22,7% in 2005. At the time, the Absa researchers said that growth in 2007 could be expected to continue the downward trend to 9% before improving again in 2008.
The index is based on the total purchase price of houses of between 80 and 400 square metres, valued at R2,7-million or less in 2006 (including improvements), in respect of which loan applications were approved by Absa. — I-Net Bridge