Johannesburg - House prices in areas formerly classified as “black township areas” under apartheid grew marginally faster than the former “white suburbs”, a First National Bank property strategist said on Wednesday.
“In the fourth quarter of 2013, the FNB Former Black Township House Price Index for the six major metro regions rose by 7.6
percent year-on-year,” John Loos said in a statement.
This growth was slightly higher than the consumer price index (CPI) and indicated a good balance between supply and demand.
A high rate of first time property buying in recent years had also, arguably, benefited the market for homes in former townships.
“From the point of view of those already owning homes, capital growth in real terms is normally welcome news.
“However, from a point of view of those still wanting to acquire homes, ongoing real price growth caused by relative supply constraints is perhaps less good news at the lower income end of the market,” Loos said.
High building costs and slow job growth made it difficult to provide housing for those who did not have a stable income.
“Nevertheless, among those that are employed, residential demand relative to supply in the lower income areas, such as the former black townships, remains solid.”
Loos said the prime interest rate was likely to rise to around 10 percent by the end of the year, which would probably slow residential demand growth and therefore house price growth across most residential segments. - Sapa