Home buyers set to feel the pinch this year

Xolile Bhengu

Xolile Bhengu

Affordability is likely to be an issue for prospective home buyers this year.

Absa estimates that home buyers will need disposable income of R12200 to qualify for a bond that will buy them a home worth R964000 - the bank's middle-market-segment average house price.

The Absa House Price Index for December 2007 released yesterday is based on the total purchase price of properties of between 80 and 400 square metres valued at R2,7million or less in 2006.

The bank index said house prices were up by 14,5percent in nominal terms in 2007 compared with 15,2percent in 2006. The bank said the average house price dropped to 11,2percent from November's year on year average of 12,5 percent.