Growth in house prices remained low in March

Price growth in the value of middle-segment homes in the South African housing market remained at a relatively low level on a year-on-year basis up to March, the latest Absa house price index shows.

Marginal monthly price growth was evident in two of the three categories of housing measured by the Absa house price indices. Real year-on-year (y/y) price declines occurred in the segments of medium-sized and large houses in the first two months of the year, while real price growth in respect of small houses edged down further in February this year.

In the category of small houses, nominal y/y price growth of 2% was registered in March, compared with 4.1% in the preceding month, thus the average price of a small house was recorded at about R794,200 in March. In real terms, price growth in this segment of the housing market came to 0.4% y/y in February.

The average nominal value of medium-sized houses was down by 0.7% y/y in March this year, after rising by a revised 0.1% y/y in the preceding month. This brought the price of a medium-sized house to about R966,300 in March. A real price decline of 3.5% y/y on average was registered in this segment of housing in February this year.

Nominal y/y price growth in the category of large houses was unchanged at 3.5% in March from February this year. The average price of a large house was about R1.5 million in March. An average real price decline of 0.2% y/y was recorded with regard to large homes in February.

Absa property analyst Jacques du Toit said the slowing pace of house price growth recorded in the first three months of the year was believed to be related to the base effect of a recovery in home values in the same period last year.

Source: Business Live