House price growth relaxes

House price growth wanes

According to Absa's House Price Index, house price growth continues to decline with March recording a nominal year-on-year growth of 26% as opposed to last year's highs of 35%.

According to Jacques du Toit, Absa's property economist and author of the report, "Taking into account the above-mentioned increase in house prices, which remained relatively strong, together with stable interest rates since August last year, the recent trend in housing becoming less affordable, has continued in March 2005".

He thinks that the affordability of housing will be one of the most important factors affecting house price growth in 2005. There is also a widening gap between what sellers are asking for and what prospective house buyers are prepared to pay.

Herschel Jawitz, CEO of Jawitz Properties, said that the rate of price growth slowing down should not be interpreted as a collapse of the market, but rather as a healthy change. It looks as if only a sharp rise in interest rates can derail the property market as the factors such as tax relief, low debt ratios and strong disposable income and support from the growing middle class will continue to support the market.

With all this excitement, it's no small wonder that the number of registered estate agents has increased from 36 000 eighteen months ago to the current 55 000.

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