Johannesburg – The upward trend in nominal house price growth continued up to January, Absa said yesterday, on releasing its house price index for January.

However, in real terms, it said, house prices continued to decline up to December, with the increase in consumer price inflation to a level of 6,3% year- on-year (y/y) influencing real price growth calculations.

“The uptick in inflation can mainly be ascribed to base effects as a result of low fuel prices in December 2008,” said senior property analyst Jacques du Toit. Prices in the category of small houses were down by a nominal 0,2% y/y in January 2010. This brought the average price of a small house to about R670100 in January.

On a month-on-month basis prices increased by a nominal 0,2%. “Prices in this category of housing dropped by a real 6,6% y/y in December, unchanged from November,” Du Toit said.

In the segment for medium-sized houses, the average nominal price increased for the first time in January since late in 2008.

“However, the price rise came to a marginal 0,1% y/y in December after revision,” Du Toit said. A price increase of 0,6% was recorded in January compared with December, causing the average nominal price in this segment of housing to come to a level of around R941000.

After adjustment for the effect of inflation, a real price decline of 6,9% was recorded in December 2009.

Du Toit said the average nominal price of large houses increased by 2,4% in the first month of the year, unchanged from December. “This brought the average price of a large house to about R1398700.”

The economy had emerged from recession in the second half of 2009 and was forecast to record real gross domestic product growth of about 2,5% this year. – Sapa