Comments from leading bank



Although the South African housing market is expected to continue to perform relatively well in 2004 its growth in both nominal and real house prices is expected to slow down from the levels experienced in 2003, according to Absa. This, the bank says in its housing price index, will nevertheless make 2004 a record fifth consecutive year of real house price increases. The anticipated lower growth in house prices this year result mainly from higher inflation and interest rates in the second half of the year. Nominal year-on-year growth of 19,6 percent was recorded in house prices in January 2004 compared with 20,1 percent in December. In real terms year-on-year growth of 19,7 percent was recorded in December. The average real growth rate during January to December 2003 was 13,2 percent. The likelihood that February will bring another interest rate cut is diminishing, although a further decline cannot be ruled out entirely. Rates should then remain stable before rising later this year in response higher inflation. The Property Professional On-line Edition 76 Article: 9 February 2004 Rodney Hayter email: hayter@icon.co.za Subscribe for your weekly property news updates brought to you by www.rodneyhayter.com, KwaZulu Natal's premier property news website.