Latest residential property market review.
The national average house price stands at R334 000, having increased by 4,6 percent, in real terms, in the first half of this year compared to the same period of 2001. The latest residential property market review from Absa also shows, however, that house prices rose by an average of only 3,5 percent in real terms in the second quarter, when compared to the second quarter of last year.And the nominal price increases in four regions - North West (4,6 percent), the Eastern Cape (7,4 percent), the Free State (8,1 percent) and the Western Cape (8,1 percent) were considerably lower than the average nominal 12,2 percent increase recorded in the second quarter.Taking into account an average 8,4 percent consumer price inflation increase for this period, prices in these regions thus actually showed a real-term decline. In fact, only in Gauteng (17,2 percent) was the average nominal price increase above the national average.Meanwhile, the figures show, there was a 12,3 percent year-on-year increase in building costs during the second quarter, which boosted the average price of a new house by 3,7 percent (real) to R429 700. The average price of pre-owned homes rose 3,1 percent (real) to R322 600 - which means it is now 24,9 percent cheaper to buy a pre-owned home that a newly-built one.As to home finance, Absa notes that the current mortgage 'base' rate of 16 percent is currently at its highest level since the third quarter of 1999, when it averaged 16,8 percent - and that the minimum monthly instalment on a new mortgage (80% of R334 000 over a 20-year repayment period) now amounts to about R3560, as opposed to R3010 at the same time last year.But there is some good news. In response to an anticipated declining trend in inflation later this year, a 1 percentage point drop in interest rates is forecast in the second quarter of 2003, and another 1 percentage point decline in the fourth quarter.• The average price of houses in the three different categories rose as follows during the second quarter, compared with with the same quarter of 2001: Small houses (80m²-140m²): 10,9% nominal and 2,3% real; medium-sized houses (141m²-220m²): 12,1% nominal and 3,4% real; and large houses (221m²-400m²): 13% nominal and 4,3% real.• Absa forecasts that there will be an average nominal price increase of 11 percent (2 percent real) this year. Article: Property24 News for the latest real estate news, visit www.property24.co.za
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