The average price of a house in South Africa has almost doubled in the past 15 years, reports real estate finance advisor Ooba.
Kay Geldenhuys, head of sales fulfillment at Ooba, reported that in 2007 the average house costs R795,000 versus R1.431.712 Today.
It noted a strong increase in recent years due to the impact of aggressive interest rate cuts in the early months of the pandemic and the competitiveness of financial institutions.
With national house price inflation slowing and inflation tends to surprise positively, real house price inflation has drifted deeper and deeper into negative territory in recent months, Geldenhys said.
“While home price inflation is likely to continue to lose momentum for the foreseeable future, inflation appears to have peaked and is expected to begin decelerating toward the Reserve Bank’s inflation target – i.e. real home price inflation. is expected to begin to improve.”
The group noted a steady increase in the average purchase price:
After a strong start to the year, economic activity weakened in the second quarter – with GDP falling 0.7% from the first quarter and pushing total economic output back below pre-Covid-19 levels, said Geldenhuys.
“Several factors depressing activity in the second quarter, including the KZN flooding, severe tax cuts and prolonged strikes, have eased and early indicators suggest GDP growth will improve in the third quarter.”
GDP growth is estimated at around 2% for the whole year.
According to Geldenhuys, despite rising inflation, higher fuel costs and the increase in mortgage interest deduction, home buyers have not been deterred, contrary to what was expected.
She said the pandemic was positive for the local real estate market – largely due to historically low interest rates in 2020 and 2021.
The recent deterioration in real house price inflation is due to the unexpected rise in inflation worldwide, Geldenhuys said. “This trend is not unique to South Africa and should stabilize once macroeconomic factors such as the situation between Russia and Ukraine ease.”
BusinessTech looked at what a 2007 home average value would look like compared to today’s average:
1 bedroom apartment / flat for sale in Fourways
3 bedroom apartment / flat for sale in Fourways
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