Bleak property outlook for 2009 - Absa
Big bank Absa (JSE:ASA) has warned that the property pain is set to continue into next year and said the housing market has cooled off "to levels not seen in many years".
Its October House Price Index, released on Thursday, still shows nominal year-on-year house growth (1,2%), but at its lowest level since January 1993.
With inflation at just over 13%, a little lower than 13,7% year-on-year in September, in real terms house prices in South Africa are falling. The figure for September is -10,1%, said Absa.
Looking at the price trends, said senior property analyst Jacques du Toit, "nominal year-on-year house price growth is at risk of moving into negative territory in the near future".
So if house price growth is still nominally positive, and the trend is for it to move into nominal negative territory and you bought a house, you would in fact be doing nothing more than "renting from the bank" for three to four times the cost of actually renting an equivalent property.
2 comments:
Plenty more tightening in the SA credit markets still to come...
The lack of credit and the number of houses sitting with negative equity is likely to put more pressure on house prices
Great Blog, thank you. My five cents worth: Real Estate Agents in Cape Town are controlling prices making sellers belief that what they are suggesting is a realistic price, yeah right, unfortunately not all of us will be suckered into believing this hey!
Post a Comment