PROPERTY: It's Not All So Bad
Recent Western Cape Business News
Some of the press and other commentators have chosen to interpret the latest FNB Western Cape house price review in a very negative way – but this, says Lanice Steward, MD of Anne Porter Knight Frank, the Cape Peninsula estate agency, is unfounded.
“The review shows that from the middle of 2009 to the middle of 2010, house price inflation changed from a minus 3% to a positive close to 5% - and John Loos, the FNB economist, comments that in the second quarter of this year house prices accelerated year on year by 13,8%.
“These, surely, are the most positive statistics we have received for some time.”
Most of the negative comments, said Steward, revolve around Loos’ prediction that a slowing in the price growth rate could now follow as the Q1 to Q2 increase was “only” 3,9% and Cape Metro sales times have increased from ten weeks to 16½ weeks – but, she points out, the FNB survey looks forward to at least 3% economic growth in the Western Cape this year – and this is almost certain, in her view, to widen the purchasing market by some 15%.
The review, said Steward, indicates that the low income/affordable housing market has to date been the best performer but shows that middle income housing is faring well – with a yearly price growth of 14,5%.
“The top-end market still has to catch up but its growth rate, at 7,7%, is now ahead of inflation, putting it once again into positive territory. The year ahead, therefore, although unlikely to be spectacular, is looking promising in comparison to the last 12 months.”
These statistics, added Steward, are particularly encouraging bearing in mind that market activity of all kinds slowed over the World Cup period.
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