House price growth to slow

2012 was a slightly better year overall than 2011‚ in terms of house price performance‚ but weak economic conditions as we entered this year suggest that 2013 average house price growth may be slightly weaker‚ John Loos‚ FNB’s household and property sector strategist said on Thursday.

“According to the FNB House Price Index‚ the average house price for the entire 2012 rose by 5 percent compared with the average price for 2011. This was a slight‚ but not too significant improvement on the average house price growth of 2011 which measured a lesser 3.3 percent‚” Loos said.

"However‚ in real terms‚ when adjusting house prices for consumer price inflation‚ 2012 continued to show mild real house price decline to the tune of -0.6 percent‚ which was a lesser decline than the real decline of -1.7 percent in 2011.

"Nevertheless‚ slight improvement or not‚ the broad real house price “downward correction” continues‚ as it has for much of the period post-2007‚" he added.

The average price of homes transacted was R845 106 for 2012‚ compared with R804 536 in 2011. In real terms‚ the FNB House Price Index remained well above levels of early last decade‚ with the real price average for 2012 still 70.7 percent above the real average price for 2001.

In nominal terms‚ the 2012 average price was 218 percent higher than the 2001 price level.

Therefore‚ as at 2012 both real and nominal price levels remained still far above the pre-boom levels of early in the new millennium.

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