|South Africa’s nominal residential land prices increased by 34,2% to about R241 100 on average in 2005, compared with growth of 41,9% in 2004, according to Absa’s Residential Property Prospective First Quarter 2006 released in Johannesburg this week. This represents real growth of 29,8% last year (39,8% in 2004).|
In the fourth quarter of 2005, nominal land prices increased by 25,1% y/y to about R257 500 on average. Real growth of 20,7% was recorded on a year-on-year basis during that quarter.
The scarcity of suitable and properly serviced land for residential development, according to the bank, has been a problem for some time, especially in the rapidly growing urban areas of the country.
Absa does not expect these conditions to materially improve in years to come. Along the coast, residential land with good views also increased significantly in value over the past few years. As a result of the supply of and demand for vacant land to a large extent moving in opposite directions in these areas, prices are expected to escalate even more in future.