South Africa's housing to remain in single digits in this year.

House prices in South Africa have generally seen some growth in the first quarter of 2014 but in the popular middle sector of the market it is nominal.
 
It shows that nominal and real year on year price growth in the middle segment of the housing market was marginally lower in the first quarter of 2014 compared with the fourth quarter of 2013.
In both the categories of affordable and luxury housing nominal price growth continued in the first quarter of the year.

The bank says that house prices continued to be driven by property market conditions and related factors which were affected by a combination of macroeconomic developments, the state of household finances and the level of consumer confidence. 
 
Based on the current trends in and prospects for economic and household sector related factors, continued single digit nominal house price growth is forecast for 2014 and 2015.
Real house price growth will be the result of the combined effect of nominal price trends and inflation, with some real price deflation projected for this year and next year,’ the report says.
In the first quarter of 2014, the average price of affordable homes of 40 square meters to 79 square meter and priced up to R545,000 increased by 3,1% year on year after rising by 4,2% in the fourth quarter of last year quarter. 
 
Some real price deflation of 2.6% year on year was recorded in the affordable segment in the first quarter compared with a fall of 1.2% year on year in the final quarter of 2013.
The average nominal price of a home in the middle segment of the market for homes of 80 square meters to 400 square meters and priced at R4 million or less increased by 8.5% year on year compared with 8.8% in the fourth quarter of 2013.

In the luxury housing market homes priced at between R4 million and R14.6 million saw prices increase by 7.7% year on year following a 7.5% rise in the fourth quarter of last year.
In real terms, the average price in this category of housing was up by 1.7% year on year in the first quarter of the year compared with 1.9% year on year in the fourth quarter of last year.
At a provincial, metropolitan and coastal level, house prices performed relatively well in most regions on a nominal and real basis in the first quarter of 2014.

The report says that the performance of the residential property market at a geographical level is affected by economic trends in general, but these regional markets may react differently to these developments as a result of various area specific factors, such as location, physical infrastructure and the level and extent of economic development and growth. 

These factors may affect property demand and supply conditions, market activity, buying patterns, transaction volumes and price levels and growth,’ it points out.

The report also states that headline consumer price inflation averaged 6% year on year in the first four months of the year, and is forecast to remain above this level in the rest of the year. ‘The property market is sensitive to inflation, so if inflation remains relatively the same then the confidence of buyers and sellers to transact will remain unchallenged.

Economists are suggesting that with expected rise in interest rates, the South African economy may head for recession. It is therefore imperative that home owners make sure they get a full Comparative Market Analysis for their property if they wish to put their house on the market. The CMA prepared by your agent will make sure that the marketing price of their home is correct and ensure a swift sale.