Nominal and real house-price growth slowed further in the first quarter of 2008, according to the latest Absa housing review.
The slowdown in growth was largely as a result of the tightening of monetary policy, stricter requirements for credit extension, and less affordable housing.
The average nominal price of affordable housing increased by 13,8% year-on-year to R277 000 in the first quarter of 2008.
Real price growth came to 3,5%, down from 9% in the fourth quarter of 2007.
Nominal price growth of 9,5% year-on-year was recorded in middle-segment housing in the first quarter of 2008, causing the average price of a house in this market segment to come to about R976 000.
In real terms, prices dropped by 0,3%.
In the luxury segment of the market, house prices increased by a nominal 6,7% year on-year to about R4,2-million.
The average price of houses in this category dropped by a real 2,9% year-on-year in the first quarter, compared with a decline of 0,8% recorded in the fourth quarter of 2007.
At a provincial level, nominal year-on-year house price growth in the middle segment of the market varied between 17,4% and -0,6% in the first quarter of 2008.
In the country’s major metropolitan areas, nominal growth in house prices of between 19,4% and 1% was recorded in the same time period.
Nominal growth in house prices along the coast varied between 21,6% and 9,6%.
Nominal house-price growth of between 5% and 6% is projected for 2008, resulting in a real price decline of around 4,5% this year, taking account of headline consumer price inflation projections.
This would be the first time since 1999 that real price growth will be in negative territory. – Sapa