Middle-markethouse prices drop
Absa Bank reported the lowest middle-market house-price growth in seven years, and said it expected a house price growth drop of 9percent in 2008, driven by a tightened monetary policy.
The November Absa House Price Index uses an average pricing of R963000 for 80square metre to 400 square metre residential properties valued at R2,7million or less.
The banking group said yesterday the middle-market house prices declined to a nominal 12percent compared to 12,5percent in January 2000.
The bank said nominal house-price growth in the first 11 months of this year had averaged at 14,9percent, compared to the same period last year, and it expected December house price growth of 14.6percent.
Real year-on-year house price growth fell to 5,3percent in October from 6,8percent in September.
Year-on-year real growth in house prices, based on the headline consumer price index in the first 10 months of 2007, averaged at 7,7percent.
Absa said the survey decline was caused by recent months' mounting economic inflationary pressures on the back of the exchange rate, and oil and food price movements.
Absa bases its index on the average house price of mortgage applications that it receives.