The average price of a house in South Africa has almost doubled over the last 15 years, reports property finance consultants Ooba.
Kay Geldenhuys, the head of sales fulfilment at Ooba, reported that in 2007 the average house cost R795,000 versus R1,431,712 today.
She noted a sharp rise over the last few years as a result of the impact of aggressive interest rate cuts in the early months of the pandemic and competitiveness among financial institutions.
With national house price inflation slowing and inflation tending to surprise on the upside, real house price inflation has continued to move deeper into negative territory in recent months, said Geldenhys.
“While house price inflation is likely to continue to lose momentum for the foreseeable future, the inflation rate appears to have peaked and is now expected to begin slowing towards the Reserve Bank’s inflation target – so real house price inflation can be expected to begin to improve.”
The group noted a steady increase in the average purchase price:
After a strong start to the year, economic activity weakened in the second quarter – with GDP declining by 0.7% from the first quarter and taking total economic output back below pre-Covid-19 levels, said Geldenhuys.
“The various factors which depressed activity during the second quarter– including the KZN floods, severe load shedding and protracted strike action – have eased and early indicators suggest that GDP growth will improve during the third quarter.”
The GDP growth rate is forecast at around 2% for the full year.
According to Geldenhuys, despite rising inflation, higher fuel costs, and increases in the prime lending rate, home buyers have not been deterred contrary to what was anticipated.
She said that the pandemic was positive for the local property market – largely due to record-low interest rates over the 2020 and 2021 period.
The recent deterioration in real house price inflation is due to the unexpected surge in inflation globally, said Geldenhuys. “This trend is not unique to South Africa and should stabilise once macroeconomic factors like the Russia-Ukraine situation subsides.”
BusinessTech looked at how a house worth the average in 2007 would look compared to the average today:
1 Bedroom Apartment / Flat for Sale in Fourways
3 Bedroom Apartment / Flat for Sale in Fourways
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