Absa House Price Index report



The Absa House Price Index, reports a nominal year-on-year increase of 22,7 % in house prices in March 2004, compared with 22,4% in February. The average year-on-year growth came to 22,3% in the first quarter of 2004. The upward trend in house price growth since October last year can largely be ascribed to the lower interest rates since mid-2003. The Index notes that in real terms year-on-year growth of 21,5% was recorded in February, the same as in January. The real growth in house prices is based on the most recent headline consumer price inflation figures, which measured 0,7% year-on-year in February. CPIX inflation has bottomed at 4% in December 2003 and is forecast to continue to increase from the 4,8% in February towards a level of almost 6% by year-end. As a result, interest rates are projected to remain stable for much of the year before rising late in 2004. Despite the strong growth in house prices in the first quarter of 2004, Absa says the growth in both nominal and real terms is expected to slow down this year from current levels. This will result mainly from higher inflation and interest rates towards the end of the year and a continuing rising trend in the ratio of house prices to income Article: Property24 News for the latest real estate news, visit www.property24.co.za