In the second quarter of 2002 the average rise in the cost of building a new house in Gauteng was 12,3 percent compared with a year ago



In the second quarter of 2002 the average rise in the cost of building a new house in Gauteng was 12,3 percent compared with a year ago. In view of this, Absa says the average price of a new house was about R429,700 in the second quarter of this year, nominal 12,7 percent and real 3,7 percent higher than in the same quarter of last year. The average price of an existing house was about R322 600 in the second quarter of 2002 (nominal 11,8 percent and real 3,1 percent higher than a year ago). This made it about R107 100, or 24,9 percent cheaper to buy an existing house than to build a new one. The average price of a luxury house, a house costing more than R1 million, rose a nominal 0,3 percent in the second quarter of 2002. This Absa says represents a decline of 7,1 percent, the largest since the fourth quarter of 2000. Absa is forecasting an average nominal price increase of 11 percent for this year, which translates after inflation prospects for the year, to real house price rise of about two percent for the year. However, it notes that the anticipated lower interest rates and improved economic growth in 2003 will probably lead to a further improvement in housing market conditions next year. Article: 31 July 2002 Rodney Hayter The Property Professional On-line Edition 49 email: hayter@icon.co.za