Absa House Price Indices - October 2011
Absa - South Africa
House price growth appears to be peaking
According to Absa’s calculations, the nominal value of homes in the medium-sized (building area of 141m²-200m²) and large (building area of 221m²-400m²) categories of the South African housing market improved further in October 2011 compared with a year ago. House prices in the small segment (building area of 80m²-140m²) continued to contract on a year-on-year basis, mainly as a result of base effects. However, year-on-year price changes appear to be peaking in all three the abovementioned categories of housing, which are related to slowing or declining price trends on a monthly basis since earlier this year.
In real terms, i.e. after adjustment for the effect of inflation, annual price deflation continued across all three segments of housing up to September 2011, impacted by rising headline consumer price inflation, which reached a level of 5,7% year-on-year (y/y) in September. The average real price (at constant 2008 prices) of houses in the middle-segment of the market (see explanatory notes) was in September this year about 13% below its peak of mid-2007. This was the result of average nominal house price growth being below the average headline consumer price inflation rate during this period.
South African homeowners not overspending-it is costs beyond their control that keep house growth below the inflation rate
Rawson - South Africa
The latest FNB house price index puts year on year house price growth at 5,1% and inflation at 5,7%, indicating that, in real terms, house prices are still declining – by 0,6% per annum.
“The higher inflation rate,” says Sean McCauley, a director of Rawson Properties, “might seem to indicate that South Africans have increased their spending. However, if you look at the main components of their payout basket comprising food, water, rates, electricity and private transport, it is clear that it is the huge increases here that are responsible for the higher inflation. South Africans are on the whole living responsibly.”
Year on year food price increases, said McCauley, are now up 8,7% year on year. Water and municipal rates have risen by 9,2%, electricity costs are up a whopping 17,3% and private transport costs by a massive 21% (due almost entirely by higher petrol prices).
FNB Property Barometer - Foreign Residential Property Buying
FNB - South Africa
SA property affordability improves mildly for foreigners, but they don’t appear to be arriving in droves yet. But do some overseas markets appear attractive for South Africans?
It was encouraging to hear one leading estate agency this week stating that it had had an increase in enquiries on its marketing websites from overseas sources. From an improving affordability point of view such a development would make absolute sense, helped on by some recent rand weakening. Working against such a positive development, however, would be considerable household sector financial pressure in much of the western developed part of the world.
As at August 2011, when our most recent 3rd Quarter Estate Agent Survey was undertaken, our sample of estate agents surveyed did not yet appear to pick up any foreign buying improvement. Using a 2-quarter moving average, the 3rd quarter showed a mild decline in the percentage of total buyers deemed to be foreigners, from a previous quarter’s 3% to 2.5%. These percentages remain low compared to the 6.5% peak back at a stage in 2008.
FNB Property Barometer_Foreign Buying Nov 2011
In-Deed Reveals Home-Buying Ages you by Two Years
PR Newswire - UK
The stress of buying or selling a home ages you by two years, according to a new study by an online conveyancing firm.
Psychologists interviewed 200 Britons who have bought or sold a house in the last three months, with more than two-thirds (68 per cent) reporting it accelerated the symptoms of ageing - according to the research by online coveyancers In-Deed.
Common side effects include hair loss (10 per cent), short-term memory failure (14 per cent) and diminished sex drive (19 per cent), with the process ageing stressed people by 25 months over the typical 15-week house-buying period.
And among the most stressed buyers and sellers, the 'ageing effect' can increase to nearly four years (47 months), according to the study, which was commissioned by online conveyancing service In-Deed
Study leader, psychologist Dr Glenn Wilson comments:
"Periods of prolonged stress and anxiety - such as when buying or selling a home - can seriously take their toll on our wellbeing, with depression, weight loss and even premature ageing a likely outcome."