Absa Announces Slower Growth in SA Home Values

December 17 - Home loan provider, Absa, showed that year on year growth on house values in South Africa slowed further in November 2010, compared to the same month a year earlier.

The growth slowed across all three categories of homes that Absa offers mortgage financing to, ie. small, medium and large houses.

Absa said that the downward trend in price levels is related to more general economic developments.

Things that impacted the market in general included job losses, slower economic growth in South Africa, a slower pace of interest rate cuts, less confident consumer purchasing, and high levels of debt due to the recession.

There was also single digit growth in mortgage advances, despite the fact that interest rates are still low and there has been a growth in real household disposable income.

Larger houses, ie. those that are between 221 m2 and 400 m2 saw price levels drop by 0.1%.

The average price for a large home is R1,407,300.

Small houses (between 80 m2 and 141 m2) average nominal prices rose by 0.8% compared to last year November.

The price of a small home around R688,100.

Absa said that real price growth for 2010 will be around 2.5% year on year.

12/17/2010 8:16:16 AM