|The average nominal house price of middle segment (80sqm to 400sqm) houses in the Durban/Pinetown metropolitan area increased by six percent in the first quarter to R832 211 from R785 299 in the fourth quarter of last year, according to Absa. This was a 17,7 percent increase over that of the first quarter of last year. |
From a KwaZulu-Natal provincial perspective Absa reports an increase of 5,8 percent to R775 160 for houses in the first quarter compared to R732 768 in the fourth quarter. This was 23,4 percent higher than in the first quarter of last year.
Prices of houses in the luxury housing segment – houses valued between R2,2m and R8,2m – declined by an average of 2,4 percent year on year in the first quarter of 2006. This, the bank says, was the second consecutive year-on-year drop in house prices in the luxury category, with prices declining by 1,6 percent in the fourth quarter of last year.
These figures are based on mortgage loans approved by Absa.
The cost of building a new house increased by a nominal 10,7% year-on-year in the first quarter compared with a growth rate of 12,1% year-on-year in the preceding quarter. This above-inflation increase in building costs reflected an active building and construction sector over the past twelve months.
Factors such as a strong demand for building materials and skilled labour in view of the demand for new housing have contributed to this development. However, the nominal year-on-year growth in building costs continued its downward trend, which commenced in the third quarter of 2003, into the first quarter of 2006. This, Absa ascribes, to the large number of developers and building contractors active in the property market, which leads to greater competition.