Folks, I'm calling it - Summer is over. Get ready for the wind and the rain. And an open thread!
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Jules
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I was lead to believe prices were falling?
Nominal house prices gains gathering pace : ABSA
The average nominal value of small, medium and large houses, for which Absa approved mortgage finance, increased last month compared with a year ago.
According to the Absa house price index for March that was released yesterday, on a month-on-month basis, home values in all three segments were also higher last month compared with February.
After adjustment for inflation, house prices were still down in February in the medium and large categories on a year-on-year basis, but were up in the segment of small housing, said Jacques du Toit, a senior property analyst for Absa.
In the category of small houses (80m2 to 140m2), the average nominal value was up by 9.6 percent year on year last month, compared with a revised growth rate of 7.3 percent year on year that was recorded in February.
The average nominal value of small houses was about R725 200 last month.
The index found that the average real value of small houses was up by 1.5 percent year on year in February, after still declining by 1.5 percent year on year in January.
The average nominal value of medium-sized houses (141m2 to 220m2) increased by 4.2 percent year on year last month, after rising by a revised 2.8 percent year on year in February.
This brought the average nominal value in this category of housing to around R965 300 last month.
The index found that in real terms, the average value of medium-sized houses was down by 2.7 percent year on year in February, after declining by 4.5 percent year on year in January.
With regard to large houses (221m2 to 400m2), the average nominal value increased by 5.3 percent year on year last month, up from 4.8 percent year on year in February.
This brought the average value of a large house to a level of about R1 438 200 in nominal terms last month.
In real terms, the average value of a large house was down by 0.9 percent year on year in February, compared with real price deflation of 2.1 percent year on year that was registered in this segment of the market in January this year.
Du Toit said the local economy was forecast to grow by a real 3.3 percent this year on the back of the global economic recovery and steadily growing domestic demand.
Consumer price inflation, currently at 5.7 percent year on year, was expected to average 5.3 percent this year.
"However, a stiff electricity price hike, as well as food price, rand exchange rate and oil price movements are still regarded as possible threats to the inflation outlook for 2010," he said.
Against this background, interest rates were projected to remain unchanged for the rest of this year, after being cut by a further 50 basis points last month.
However, a rate hike of 50 basis points was expected in the first quarter of next year.
Du Toit said with household sector finances expected to improve during the course of this year on the back of the economic recovery, leading to higher levels of employment and growth in household disposable income, the residential property market was forecast to gather further momentum.
"Growth in the nominal value of houses is forecast to be 6 percent to 7 percent higher in 2010 compared with last year," Du Toit said.
What would have me more concerned is that with the rather low interest rates and the peak buying / selling season this is the best price increase that can be achieved.
I note with interest that only the smallest houses are achieving real (i.e. after inflation) price increases. Perhaps the interest / demand in the smallest (and cheapest) category is due to affordability issues.
You may be interested in taking a look at the level of indebtedness of the SA consumer:
If people are struggling with their debt at this low an interest rate then it will most likely be painful as the interest rate rises again. I.e. any recover will be slow and drawn-out.
Once again, this supports the thesis advanced on this blog that the bottom end of the market is being squeezed while the top end is a buyer’s market. It is also obvious when it comes to rentals, much more so actually because many households that would have bought a house are deeply in debt, have lost an income stream and cannot buy. For the time being we remain at the mercy of rentier filth who produce nothing and create no value. they just occupy vital resources while their marks slave to make them rich. Income without work – the definition of parasite. Landlords: when this bubble collapses don’t expect bailouts, sympathy or even a half smoked stompie for your tin cup. Bosluise moet vertrap word.
@ anonymous2 re: comment on 'rentier filth', ". What is your take on stock market investments? Do they fall into the same category: "produce nothing and create no value" and "income without work". Do these discriptions extend to stock market moguls?
4 comments:
Copy and paste below...
I was lead to believe prices were falling?
Nominal house prices gains gathering pace : ABSA
The average nominal value of small, medium and large houses, for which Absa approved mortgage finance, increased last month compared with a year ago.
According to the Absa house price index for March that was released yesterday, on a month-on-month basis, home values in all three segments were also higher last month compared with February.
After adjustment for inflation, house prices were still down in February in the medium and large categories on a year-on-year basis, but were up in the segment of small housing, said Jacques du Toit, a senior property analyst for Absa.
In the category of small houses (80m2 to 140m2), the average nominal value was up by 9.6 percent year on year last month, compared with a revised growth rate of 7.3 percent year on year that was recorded in February.
The average nominal value of small houses was about R725 200 last month.
The index found that the average real value of small houses was up by 1.5 percent year on year in February, after still declining by 1.5 percent year on year in January.
The average nominal value of medium-sized houses (141m2 to 220m2) increased by 4.2 percent year on year last month, after rising by a revised 2.8 percent year on year in February.
This brought the average nominal value in this category of housing to around R965 300 last month.
The index found that in real terms, the average value of medium-sized houses was down by 2.7 percent year on year in February, after declining by 4.5 percent year on year in January.
With regard to large houses (221m2 to 400m2), the average nominal value increased by 5.3 percent year on year last month, up from 4.8 percent year on year in February.
This brought the average value of a large house to a level of about R1 438 200 in nominal terms last month.
In real terms, the average value of a large house was down by 0.9 percent year on year in February, compared with real price deflation of 2.1 percent year on year that was registered in this segment of the market in January this year.
Du Toit said the local economy was forecast to grow by a real 3.3 percent this year on the back of the global economic recovery and steadily growing domestic demand.
Consumer price inflation, currently at 5.7 percent year on year, was expected to average 5.3 percent this year.
"However, a stiff electricity price hike, as well as food price, rand exchange rate and oil price movements are still regarded as possible threats to the inflation outlook for 2010," he said.
Against this background, interest rates were projected to remain unchanged for the rest of this year, after being cut by a further 50 basis points last month.
However, a rate hike of 50 basis points was expected in the first quarter of next year.
Du Toit said with household sector finances expected to improve during the course of this year on the back of the economic recovery, leading to higher levels of employment and growth in household disposable income, the residential property market was forecast to gather further momentum.
"Growth in the nominal value of houses is forecast to be 6 percent to 7 percent higher in 2010 compared with last year," Du Toit said.
Business Report
Hi Jules
They have, until now.
Although I wouldn't break out the champagne if I were a landlord just yet.
Affordability is out the window and this is with interest rates at a historically low level:
It's harder to own a home - FNB
http://fin24.com/articles/default/display_article.aspx?Channel=Personal-Finance_Property&ArticleId=1518-2386-2401_2578534&IsColumnistStory=False
The buying for investment purposes is looking to be under huge strain:
Buy-to-let hits rock bottom
http://fin24.com/articles/default/display_article.aspx?Channel=Personal-Finance_Property&ArticleId=1518-2386-2401_2579081&IsColumnistStory=False
Basically for every good piece of news there is a bad piece of news to match:
http://fin24.com/personal_finance/Default.aspx?Category=Property
What would have me more concerned is that with the rather low interest rates and the peak buying / selling season this is the best price increase that can be achieved.
I note with interest that only the smallest houses are achieving real (i.e. after inflation) price increases. Perhaps the interest / demand in the smallest (and cheapest) category is due to affordability issues.
You may be interested in taking a look at the level of indebtedness of the SA consumer:
SA struggling to bounce back
http://www.fin24.com/articles/default/display_article.aspx?ArticleId=1518-25_2579286
If people are struggling with their debt at this low an interest rate then it will most likely be painful as the interest rate rises again. I.e. any recover will be slow and drawn-out.
L.S.
Once again, this supports the thesis advanced on this blog that the bottom end of the market is being squeezed while the top end is a buyer’s market. It is also obvious when it comes to rentals, much more so actually because many households that would have bought a house are deeply in debt, have lost an income stream and cannot buy.
For the time being we remain at the mercy of rentier filth who produce nothing and create no value. they just occupy vital resources while their marks slave to make them rich. Income without work – the definition of parasite.
Landlords: when this bubble collapses don’t expect bailouts, sympathy or even a half smoked stompie for your tin cup. Bosluise moet vertrap word.
@ anonymous2 re: comment on 'rentier filth', ". What is your take on stock market investments? Do they fall into the same category: "produce nothing and create no value" and "income without work". Do these discriptions extend to stock market moguls?
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