2009/02/04

The average nominal price of middle-segment housing was marginally down by 0,03% year-on-year (y/y) in January 2009 after almost no growth at just 0,1% y/y was recorded in December last year, the country's biggest mortgage lender, Absa, said on Wednesday.

The bank said that this brought the average price in this segment of the market to about R962,800 in January.

In real terms, middle-segment house prices were down by 8,6% in December, while declining by an average of 6,9% in 2008, after rising by 7% in 2007. Last year was the first time since 1999 that house prices dropped in real terms on an annual basis.

All real house price calculations are based on headline consumer price inflation.

On a month-on-month basis, nominal house prices in the middle segment of the market have been on a declining trend since mid-2008, while in real terms prices have already been declining month-on-month since September 2007.

Nominal price growth in respect of small houses came to 0,9% y/y in January 2008, from 0,8% y/y in December.

The average nominal price of a small house came to about R685,700 in January. In real terms, prices in this category of housing dropped by 8% y/y in December and were down by an annual average of 5,4% last year (up by a real 4,2% y/y in 2007).

The average nominal price of medium-sized houses increased by a meagre 0,2% y/y in January (0,5% y/y in December), which brought the average price to R949,700.

"On a month-on-month basis the average price of medium-sized houses dropped for the third consecutive month in January," the bank said.

Prices in this category of the middle segment dropped by a real 8,3% y/y in December last year and were down by a real 6,2% in 2008 compared with real growth of 9,8% with 2007.

In respect of large houses, prices dropped by 1,6% y/y in nominal terms to around R1,368m January 2009 after declining by 0,9% y/y in December.

Prices were down by a real 9,5% y/y in the large category December, while declining by 5,6% in real terms in 2008, compared with a real increase of 9,7% in 2007. – I-Net Bridge