Marginally positive year-on-year growth was recorded in the average value of homes in the middle segment of the South African housing market in August 2012‚ while trends in month-on-month growth point to a continued subdued price performance in the near term.
This is according to the Absa house price indices‚ which are based on applications for mortgage finance received and approved by the bank in respect of small‚ medium-sized and large homes.
Home values in the middle segment of the housing market were up by a marginal 0.2 percent year-on-year (y/y) in August this year after declining by a revised 0.5 percent y/y in July.
Annual house price growth has been in negative territory since the beginning of the year‚ largely affected by continued price deflation in the small category of the middle segment of the market.
On a month-on-month basis house prices improved gradually since the end of the first quarter this year‚ but monthly growth is slowing down again in all three middle-segment categories.
In real terms‚ i.e. after adjustment for the effect of inflation‚ house price deflation continued up to July 2012‚ but the momentum is slowing down on the back of nominal price trends and the headline consumer price inflation rate which tapered off to 4.9 percent y/y in July from a recent high of 6.3 percent y/y in January this year‚ Absa’s property analyst Jacques du Toit said.
The average nominal value of homes in each of the three middle-segment categories of the housing market was as follows in August 2012:
- Small homes (80m²-141m²): R688 400
- Medium-sized homes (141m²-220 m²): R1 021 500
- Large homes (221m²-400m²): R1 491 600