The on-going endeavour among property trend watchers to obtain a clear picture of movements in the housing sector was recently given clarity by a thorough analysis from Absa.
Commenting on this, Bill Rawson, Chairman of the Property Group, said that the survey indicates that the average value of South African homes in the middle segment may well have reached its upper point in March of this year and, from now on, growth will be less spectacular.
“Although there might be some who would quibble with this,” said Rawson, “the middle segment of South African housing is usually seen as the defining indicator because it represents some 80% of the total market. Over the past year this segment has delivered a very good performance and Absa have shown that in April it achieved a year-on-year growth of 11,1%. However, they have also predicted that growth will fall below 10% for the remainder of this year and possibly into 2014.”
Absa, added Rawson, have calculated that the average value of the middle sector homes sold in 2013 was:
· R736,800 for the small homes (80 m2 to 140 m2 in size);
· R1,066,500 (for middle size homes (141 m2 to 220 m2); and
· R1,615,400 for large homes (221 m2 to 400 m2)
“The Absa figures and graphs,” said Rawson, “show clearly that a low point was reached in early 2012 when real growth was not achieved in any of the three segments. In nominal terms, at that time, large homes witnessed almost a 40% drop-off in value from the late 2009/ early 2010 peak, while medium and small homes fell by around 13%.
“The good news, however, is that from early 2012 all categories of housing witnessed a sustained improvement which has run through until now and, although slowing, is likely to carry on at a rate above 8%.”
Those who like being given the whole picture, said Rawson, should take note that growth in the small homes (80 m2 to 140 m2) is still at a startling ± 14% (almost double that of the medium sized homes and over four times that of the large homes).
“If you are in the buy-to-let market and if you have a good rental agent who is capable of controlling your tenants well,” he said, “it could pay to focus on the smaller homes, almost to the exclusion of all others.”
For further information contact Bill Rawson on (021 658 7100) or email him at bill@rawsonproperties.com.
