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The Average house price now increasing at 6.8% per
The lengthy period of low interest rates and a fading economic recession puts Gauteng’s property market in positive terrain.
The FNB house price index shows a slight increase in Q1 2012. From Q1 2011, the average house price has increased by 6.8% in Q1 2012. This is the highest growth rate in Gauteng since Q2 2008. With the property market being driven primarily by residential demand in Gauteng, it is more stable than some of the countries’ smaller property regions. Roughly two and a half years after the major rate cuts in 2009, the market seems to be gaining more resistance.
The average property price for Gauteng was R866,806 in Q1 2012, this price level is only 9,3% higher than the level reached in Q2 2008. The City of Joburg shows the most growth in the property market of the 3 major metros. In Q1 2012, the FNB market strength indices per Gauteng Metro pointed to City of Joburg having the best balance between supply & demand at 49.4 just short of 50 at which demand would match supply. From FNB’s valuation of activities in the area, it shows that Gauteng’s market stability draws from the Northern Suburbs of Joburg where the economies of the regions business nodes hold up better in tough economic times, as many corporate companies consolidate costs by integrating certain functions to head offices based in this area.
Heightened congestion and increasing transport costs should benefit Joburg’s Nothern suburbs even more compared to other regions of greater Johannesburg as this is arguably the provinces main commuter destination.