Bullish ABSA house price figures confirm Greeff Properties' mid year predictions

Among those to crack a bottle of champagne this week after reading the latest housing price statistics from ABSA were Mike Greeff, CEO of the Cape Peninsula estate agency Greeff Properties, and his MD, Graham Leslie.

“ABSA’s figures tie in almost exactly with what we were predicting would happen as early as April/May this year,” said Greeff. “At the time we were accused of talking the market up - but if anyone has kept a record of our statements they will see that we said that the Cape Peninsula house prices would once again be in positive territory by the last two months of this year. We were, therefore, within one month of getting it right.”

ABSA’s index shows that in September house prices for the first time rose (by 1,3%) and this was followed by a 2,6% rise in October.

While it has to be admitted, said Greeff, that ABSA’s figures based on an average middle segment house price of R991,200 were bound to be more bullish than standard (based on a median price of R553,300), Standard Bank have also agreed that prices have bottomed out and are likely to pick up soon.

Greeff said that his sales figures show that certain areas, began to reverse the trend as early as July, but at that stage only some houses showed an uptick, others continuing to lose value.

Nevertheless, he said, the Cape Peninsula house prices had “as always” performed better than those of the rest of South Africa and average sales price drops in Greeff’s areas did not exceed 4% on the 2007 highs.

“This compares very favourably with the 25% plus, of such fashionable areas as Sandton in Gauteng and Kloof in KwaZulu Natal,” said Leslie.

Future price rises, said Greeff, could see house prices moving ahead of the inflation rate before the end of 2010.

“At present,” he said, “we still lag the inflation rate by 1% to 3%, but this is now changing. The economy has taken a terrible hammering and nearly 1 000 000 people, we are told, have now lost their jobs but if current trends continue, as we expect, property owners will see their assets producing inflation-beating figures by the third quarter of 2010. As always, property is running six months behind the stock market curve, but with the All Share Index now at 27 000 (only 20% off the 2008 peak) there is light on the horizon.”

Article by: www.greeff.co.za