Property Market on the Way to Recovery

March 12 - Average house prices across the board showed signs of improvement, leading Absa's home loan division to report that they believe that the residential property market is on its way to recovery.

According to Absa, improvements were seen in the small house, middle size and large house categories in February.

The results were compared to house prices in the same categories in 2009, with growth reported in all three.

The large house category showed the highest growth percentage, with Absa reporting that average prices rose 3.3% to R1.4 million.

The middle sized category showed improvements of 2.2%, with nominal prices being recorded at R952,600.

The average nominal price in the small house category also showed growth, albeit smaller than the former two categories, at 1.6% year on year to R676,000.

Absa believes that as South Africa comes out of a poor financial era, things will start to pick up even more in the property market.

"After emerging from the recession in the second half of 2009, the South African economy is expected to grow by a real 2.8% in 2010," said the senior property analyst at Absa, Jacques du Toit.

The Absa Group showed that the nominal value of houses is expected to grow by around 6% in 2010, in comparison with 2009.

In real terms, the prices of houses were still lower when compared to February last year.

Absa defines housing categories according to their sizes.

A small home is 80m2 - 140m2, a medium sized home is 141m2 - 220m2 and a large home is 221m2 to 400m2.

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3/12/2010 11:11:27 AM