The latest Absa property review shows that house prices declined only marginally in 2009 after serious drops in 2008, says Graham Leslie, MD of Greeff Properties.

“Since May they have in fact been rising in nominal terms. Although, taking into account the effect of inflation, in real terms declines continued until October although at a slower pace than in 2008,” he says.

“Absa’s December report shows that middle segment house prices in November rose year on year by 4,7% to achieve an average sale price of R1 006 300. Large homes increased by 3,5% to R1 419 700.

“It becomes clear from the report that larger homes lifted the average figures significantly, and all homes in fact moved into a year on year growth phase in the last two months of 2009. Although this growth didn’t match the current inflation rate, it is encouraging to see that the lengthy period in which homes steadily lost value has now apparently ended.”

He says the Absa report predicts that, if the current trend continues, a 5% overall growth rate on residential property can be expected in 2010. However, he says even though Cape houses are coming off a higher base, Greeff Properties estimate that an 8% growth rate in Cape property values will be achieved this year.

“This should encourage property watchers to buy now. If they do, we believe they will be catching the market on an upswing. If they leave it to the middle of the year they could well have to pay up to 5% more than current prices,” says Leslie.