Absa: Bleak outlook for residential property

The outlook for the residential property market in 2009 remains bleak, Absa said on Thursday.

“Levels of activity are set to stay subdued up to the second half of the year, while prices in the middle segment of the market may decline by as much as 2,5% in nominal terms this year,” said property analyst Jacques du Toit.

A further real decline in house prices was expected in 2009, based on projected consumer price inflation trends and declining nominal prices.

In respect of the various categories of housing (small, medium and large housing in the middle segment as well as affordable and luxury housing), activity levels and prices were expected to remain under pressure well into 2009.

All these categories were expected to bottom out in the second half of the year and pick up gradually towards year-end. Levels of activity and prices were only expected to markedly improve from 2010 onwards.—Sapa

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