Penin­sula prop­erty prices on rise – Absa

Weekend Argus (Saturday Edition) - - BUSINESS -

HOUSE prices around the Cape Penin­sula and along KwaZu­luNatal’s North Coast grew “rel­a­tively strongly” the past year, ac­cord­ing to Absa’s lat­est quar­terly hous­ing re­view.

“House prices along the coast im­proved fur­ther in the sec­ond quar­ter of 2013, grow­ing by a nom­i­nal 15.6 per­cent year-on-year, af­ter be­ing in a state of de­fla­tion from late 2011 up to mid-2012.”

The bank’s Third Quar­ter 2013 Hous­ing Re­view, re­leased yes­ter­day, finds the rel­a­tively strong per­for­mance of the coastal hous­ing mar­ket was driven largely by two re­gions.

“The North Coast of KwaZulu-Na­tal posted nom­i­nal house price growth of 42.7 per­cent year-on-year in the sec­ond quar­ter of this year.”

This was in­dica­tive of re­cent de­vel­op­ment along this sec­tion of the prov­ince’s coast­line, and a con­se­quent in­creas­ing de­mand for pri­mary res­i­den­tial prop­erty.

“The Cape Penin­sula and False Bay area in the Western Cape also recorded rel­a­tively strong nom­i­nal growth in the sec­ond quar­ter of the year, com­ing in at 16 per­cent yearon-year.”

How­ever, coastal re­gions in the Eastern Cape fared nowhere near as well, with house prices drop­ping.

“The Eastern Cape coastal re­gion, de­spite hav­ing two metropoli­tan ar­eas (Port El­iz­a­beth and East Lon­don), recorded nom­i­nal price de­fla­tion of 3 per­cent year-on-year in the sec­ond quar­ter of 2013.”

Ac­cord­ing to the re­view, the drop in prices in this re­gion was “re­lated to base ef­fects and came against the back­drop of rel­a­tively strong price growth recorded in es­pe­cially East Lon­don a year ago”.

On the aver­age price of houses around the coun­try, the re­view finds this has grown in real terms over the past year.

“The aver­age nom­i­nal price of a new house was up by 9.8 per­cent year- on- year to about R1 716 000 in the sec­ond quar­ter of the year, which trans­lated into real price growth of 3.8 per­cent year-onyear.

“The aver­age price of an ex­ist­ing house in­creased by a nom­i­nal 11.9 per­cent year-onyear to R1 135 200 in the sec­ond quar­ter, which came to a real in­crease of 5.8 per­cent year-onyear in the quar­ter.”

As a re­sult, it was R580 700, or 33.8 per­cent, cheaper to have bought an ex­ist­ing house than to have a new one built in the sec­ond quar­ter of this year.

“The price dif­fer­ence be­tween new and ex­ist­ing hous­ing has re­mained rel­a­tively sta­ble at just be­low 34 per­cent since the sec­ond quar­ter of last year.” – Sapa

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