House Price Index Rises in August

September 24 - The house price index in South Africa has risen by 3.8% in August. This increase is considered to be moderate when compared to figures from the start of the year.

The oobarometer price index showed that the average price to purchase a house went up from R795 241 to R825 264 when compared to last August's figures.

First time buyers were also being made to spend more on their first home, as prices increased by 3.1% in this sector.

Other findings were that the average approved bond increased by 20,4% from R596 575 to R718 268.

Saul Geffen, the CEO of Ooba, the South African bond originator said that house prices have been very resilient despite the economic environment in the country. He said that it was expected that the growth will slow down during the second half of the year, following strong figures in the first half of 2010.

Another factor impacting the house price index was the cutting of interest rates last week which brought the rate down to the lowest it's been in 30 years."

Geffen said: "Whereas there is some relief for home owners and home buyers with a 50 basis points cut, given the slowing economic recovery and high debt ratio, the cut is unlikely to have any significant impact on the property market. Of course, interest rates in single digits is a positive and the benefits of improved affordability and sentiment will certainly filter through to demand and lending."

9/24/2010 10:22:22 AM