ABSA House Price Index: February 2010
The basic principle of investing is: Buy Low and Sell High
Property prices have bottomed out and are on the way up. The rate at which prices are increasing is also gaining momentum. Interest rates are forecast to remain at these current low levels, while only increasing by about 0.5% towards the end of 2010 or early 2011. At the same time most banks have a large supply of repossessed properties in stock.
Meanwhile the ABSA House Price Index, shows that property prices in all categories increased in February compared to a year ago.
These figures are based on properties for which ABSA approved home loans for in February.
The average growth rate from Feb 2009 to Feb 2010 of:
- Small sized houses (80 – 140sqm) was 1.6%
- Medium sized houses (141 – 220sqm) was 2.2%
- Large sized houses (221 – 400sqm) was 3.3%
The average price for a :
- Small house is R676 800
- Medium house is R954 600
- Large house is R1 408 000
Jacques du Toit, Senior Property Analyst of ABSA Home Loans, also maintains his earlier forcast that property values are expected to increase by 6% for the year 2010.
This is slightly lower than the FNB House Price Index forecast of 8% growth in property prices for 2010.
As a buyer you still have an opportunity to secure a bargain as some sellers may be struggling to sell, while still benefitting from the upward trend in property values going forward.
Most property experts agree that the market has reached its bottom, and although the recovery will not be fast we will see a health steady growth in property prices for the next couple of years.
If you are considering selling, you would be better waiting a few months until the end of the FIFA World Cup. Allow you property to benefit from capital gains over this period, and you may be able to secure an extra R50k depending on the size of your house.
Downloads: ABSA House Price Index report
Before you rush out to buy, remember investing in property is usually a long term plan, and managing a Home Loan is possibly the biggest financial commitment you’ll ever make.
Before, committing yourself to a 20-year bond, ensure that you are financially able to cope with possible further upward rate adjustments.
For more assistance with regards to Applying for Home Loan Finance contact one of our consultants.
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