Housing market on the rise

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THANDI XABA

Property consumers have high reason to be pleased this year as the housing and property market indicates drastic progress of a 3% increase on the average house price inflation from 2013 to 2014. Economist Amelia Morgenrood says at this stage 2015 looks very positive and the huge factor contributing to the valuation of property is the decrease in global oil and food prices.
"At this stage 2015 looks very positive. There is a huge factor contributing to the valuation of property. So, if we don’t expect interest rates to rise quickly, soon we’ll still have the scope of property price increasing," she says.

The average house price in December last year was R985 405. Morgenrood says in the last three years there has been a mild increase in the value of property. Consumers who purchase houses and sell after a few years are in a better financial position and can thus create wealth themselves.

She mentions at the moment the oil price is continuously falling and if this trend continues and the rand can stay at its current level, the country might experience another drop in petrol prices next month.

On average house prices for December rose by 6, 87% year on year. "If you adjust it with inflation then real growth was 0.99% year on year in November, so it’s been a trend over a year or two to see a stronger house sales market. For instance in 2013, the average house price inflation was 6.8% and in 2014 it was 7.1% so that is a little higher the CPI, which indicates there is a slight improvement on the house market year on year," she adds.

This trend has obviously continued over the past month and has put some downward pressure on the general household sector’s cost of living.

Morgenrood highlights: "Cost of living is not increasing that much, so that gives you a bit of spending money in your pocket."

thandi@centralmediagroup.co.za