Absa: Housing Review

Summary

• Real growth in the South African economy slowed down to an annualised rate of 0,2% in the third quarter of 2008, driven by sharp contractions in the mining, manufacturing and trade sectors, while the agricultural and construction sectors posted relatively strong growth compared with the preceding quarter.
• The household sector was under severe financial pressure last year on the back of rising inflation and interest rates, while growth in real household disposable income tapered off to its lowest level in ten years.
• In 2008 nominal house price growth slowed down markedly across most segments and geographical regions, while in real terms, prices dropped over a wide front as a result sharply rising inflation.
• The average nominal price of affordable housing increased by 10,0% to R283 500 in 2008...

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