Another bank warns that consumers are in for an uphill battle. This time Absa states that the property market is moving into negative territory after statistics were released showing that price growth is at its slowest pace in 15 year. This situation comes after shocking interest rates and inflation caused consumers to tighten the belt.
Absa said that nominal house prices advanced at an annual rate of 1,2% last month – the slowest since January 1993 - after gaining a revised 1,7% in September. This bought the average house price to R696 100. Last month’s statistics also showed that the average nominal price of a small house is about R687 100, with the average price for large houses showed an average price of R1,394m.
Next year’s nominal house price growth is expected to be even lower and real prices were set to decline next year for a second successive year, said Jacques Du Toit, senior property analyst at Absa Home Loans.
“In view of current and expected economic conditions, the outlook for the housing market towards the end of 2008 and into 2009 is bleak.”
The information in this article is courtesy of Business Day (“Local property market outlook bleak” – 7 November 2008)
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