Property heading for meltdown?

It seems that, according to recent data released by South Africa's banks and other housing commentators, the chances of house prices falling in both nominal and real terms are highly unlikely. Both Jaques du Toit of ABSA and John Loos of FNB expect house price growth to exceed 10% this year. The demand for housing by South Africa's middle class is insatiable and when it is combined with escalating building costs and growing land scarcity house prices will continue upwards for at least another four years.

Regarding household debt levels, Elna Moolman of Standard Bank argues that homeowners actually have scope to borrow more, especially if one considers that SA mortgage debt as a percentage of disposable income is still at a "comfortable" 40% compared with 78% in the US, 120% in Australia and 105% in Britain.

Article on fin24.co.za