Dormehl Property Group’s view point on the house price index

Owen Dormehl, CEO of Dormehl Property Group says “April’s double digit house price increase is positive news indeed. Hopefully it will endower our major banks with the confidence they require to now further relax their lending criteria which in turn will have the much needed knock-on effect of assisting with the momentum required to sustain this early evidence of real estate price growth. It must be remembered that for FNB to have arrived at the 10.1% price inflation figure they have ‘pooled’ all of the relevant data available to them which translates to this figure being a ‘generalization’ of the markets movement. Consequently there are areas where the growth has been even more significant but unfortunately there are also areas where there has been virtually no growth at all.

The age old golden rule still applies. Increases in property prices are still primarily reliant on the most fundamental market drivers which predominantly are supply and demand plus the vital ingredient of purchaser’s ability to be able to access either capital or meaningful mortgage finance”.

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