Property prices on upward trajectory

Lightstone's June repeat sales indices, released on Wednesday, confirm that house prices are leaving the doldrums and heading towards positive terrain.

South Africa's residential property prices slipped into negative terrain in late 2008 after growth slowed steadily from late 2004.

Interest rates have been chopped repeatedly since December, and data released by banks and other organisations are increasingly showing the benefits of lower interest on debt repayments. As interest rates have declined, so house price deflation appears to have slowed.

Mortgage originator ooba said this week its books are already showing price growth year-on-year of about 1,8%.

Absa bank, meanwhile, said last week year-on-year price gains could be in the region of 2% by the end of the year. However, overall house owners can expect their properties to have fallen by about 3% in value in 2009.

Estate agents are also reporting an increase in interest from buyers.

The Lightstone Repeat Sales Index is based on data from the Deeds Office, Surveyor General and other sources.

The national house price figure (year-on-year) for June was -0.3%. The Eastern Cape has been South Africa's best property performer, with a price gain of 4.8%.

The Western Cape had also tipped into positive terrain (0.5%) by June.

City of Tshwane was the worst performer (-3.7%), while overall affordable houses produced the highest capital gains for sellers, at 10.8%.

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