House Prices Keeps Dropping

The information in this article is courtesy of iAfrica (March House Prices Down – April 1 2009).

The latest FNB house price index shows that house prices are down by 7.8% year-on-year in March after declining by 6.2% year-on-year in February.

Johan Loos explained that the weak economic environment is contributing to a significant amount of ‘offloading’ of property with the FNB Property Barometer survey reporting estate agents’ estimates that about 26% of total sellers are selling in order to downscale due to financial pressure.

According to Loos, this means that it remains likely that the current situation of national year-on-year house price decline will continue for most of 2009.

The index shows that the first quarter of 2009 showed that a freehold two-bedroom house stands at R315 468, declining by 13.2% year-on-year.

The average price of a sectional title ‘two-bedroom and less’ market continued to fair considerably better than freehold property with three-bedroom seeing most of its recent price deflation coming to an end.

Loos predicts that this year-on-year price deflation is expected to be with us for most of the year until such time as oversupplies are mopped.

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