The 2nd quarter 2013 Absa Housing Review presents the latest developments in the South African economy, household sector and the residential property market, with trends in house prices on a segment and geographical level up to the 1st quarter of 2013.
Nominal year-on-year house price growth in the middle segment of the market accelerated to above 10% in the 1st quarter of 2013, with indications of a moderation in price growth later this year that emerged towards the end of the quarter. In real terms house prices increased in the 1st quarter of the year after deflating for nine consecutive quarters from the 4th quarter of 2010 up to end-2012. House price growth in the category for affordable housing remained in positive territory in the early stages of 2013, whereas price deflation in the luxury segment accelerated in the 1st quarter of the year from late last year.
Single-digit nominal house price growth is forecast for 2013, which will be the result of recent developments regarding price growth, as well as trends in and prospects for the economy, household finances and consumer confidence. These factors are expected to be reflected in the performance of the residential property market in the rest of the year. Based on expected trends in nominal price growth and headline consumer price inflation, very little, if any, real house price inflation is projected for 2013.