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Friday, November 4, 2011

Housing market still in the doldrums

If you have not read this on then here is that latest news article:

Housing market still in the doldrums

... “Many consumers are still battling with impaired credit records, negatively affecting their ability to take up credit,” said senior property analyst at Absa Jacques du Toit. He pointed out that mortgage finance remained under pressure in the third quarter and on a year-on-year basis. This contributed to the lacklustre performance of the residential property market. House prices have been declining in real terms and are scheduled to conclude the year in negative territory. ... "the affordability of housing remained relatively favourable up to mid-2011. However, many households’ ability to take advantage of these affordability trends is still hampered by a relatively high level of indebtedness, impaired credit record, the impact of the NCA and the banks’ resultant lending criteria,” said Du Toit.

According to ABSA:

Small house prices dropped by a nominal 3.2% in the third quarter (8.3% in real terms) and medium-sized house prices declined by a nominal 4.2%. Du Toit said although growth was still very low at 0.6% large houses remained in positive territory in the past quarters in nominal terms.

Affordable housing prices increased by a nominal 1.5% year-on-year to about R314000 in the third quarter of the year. This category still recorded price deflation of 3.9% in real terms.

The Absa review data states that the cost of having a new middle-segment house built was up by 4.5% year-on-year in the third quarter of 2011, after rising by 3.6% year-on-year in the preceding quarter. Factors impacting on building costs included material, equipment, transport, labour, developer and contractor profit margin costs including the cost of suitable vacant development land which was impacted upon by aspects such as scarcity, the availability of services and the cost of rezoning.

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