House-price growth slows to 4,3%

NOMINAL house price growth slowed further last month to an annual level of 4,3%, the lowest price growth since late 1999, Absa said today.

This was down from a revised 5,5% in April and brought the average price of a middle-segment house to about R960,700. However, in real terms, house prices in the middle segment of the market dropped by 5,0% in April, compared with a decline of 3,4% recorded in March, based on headline CPI inflation.

"This was the biggest real year-on-year drop recorded in house prices since March 1997, when it was at a level of -5,2%, based on nominal price growth of 3,9%, and a headline CPI inflation rate of 9,6% at the time," Absa said.

On a month-on-month basis, revised nominal house price growth was negative to the tune of 0,1% between March and May this year, which was the first nominal month-on-month price drop since January 1999.

As a result, the average nominal house price has declined by about R4,000 over the past three months, Absa said.

In real terms, house prices dropped by a further 1,9% in April from March. The real price of a middle-segment house has dropped by a total of R37,200, or 5,7%, from an all-time high of around R651,600 in August last year to about R614,400 in April this year.

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