House prices fall as rates bite

By Staff Writer

From Fin24, Apr 1 2008.

Johannesburg - Median residential house prices fell in March as
household budgets come under strain from higher interest rates,
a survey showed on Tuesday.

The monthly Standard Bank property gauge put annualised house
prices down 5.2% last month - the first contraction in average
prices in almost eight years.

The median house price fell to R550 000 from R580 000 rand in
the same month in 2007, while the five-month moving average was
up only 0.2% year-on-year.

Need R550 000? Apply for a home loan with Justmoney today!

"The persistent deterioration in the demand-side drivers of the
South African economy of late has increased the chances of
negative growth in residential property prices," the bank's
property economist Sizwe Nxedlana said in a statement.

"In March, residential property prices...entered into negative
territory for the first time since...June 2000."

A property boom between 2003 and 2005, boosted by interest rate
cuts, pushed house prices sharply higher, outperforming growth
in income and rentals and knocking affordability.

A series of rate increases, however, from mid-2006 has cut into
household budgets, making it more difficult to repay mortgages.

"The reduction in affordability has been exacerbated by the
reversal of monetary policy easing in the latter part of this
period (2004-2006)," Nxedlana said.

"By our estimates South African residential property remained
expensive in level terms in the second half of 2007."

But he added the recent low growth rates could signal a return
to affordability.

Recent Articles

Featured Your guide to debt counselling

The National Credit Regulator (NCR) reported more than 20 million consumers to be in debt in 2018 and 40% of them were behind with their payments. Due to the economic conditions in the country, many consumers find themselves incurring too much debt that they cannot repay.

Read more

Should you take a sabbatical this year?

In South Africa, sabbaticals are not as common among the general workforce – but they have become popular among executives and CEO’s. Justmoney finds out what a sabbatical is, how to convince your employer to let you take one, and how to manage your finances before and while you’re away.

Read more

A photographer’s journey into entrepreneurship

This week Justmoney chatted to this 25-year-old to understand what makes her tick, what her thoughts on money management are, and the financial advice she has for other young entrepreneurs.

Read more

Travel insurance through medical aid: Is it enough?

Having travel insurance as an added benefit with your medical aid is common practise, but what does it cover and is it enough?

Read more

Sign Up

To our weekly newsletter for advice you can bank on

Deals

Steers Varsity Cup Monday Madness

Price: R59
When: Mondays
Where: Kimberly

Old Mutual Actuarial Bursary

Price: R0
When: 26 March - 30 May
Where: Nationwide

Tsogo SunBreaks Vacay Special

Price: R1,115 per room
When: 15 -31 March
Where: Gauteng, Cape Town, and Durban