Home prices decline but offices in demand: SARB

While residential property prices continued to fall during the year, office property demand strengthened with vacancy rates declining in all four major central business districts, the central bank said.

According to the latest Absa - the country’s biggest home loans lender - house price index, house prices growth fell from 15.8% to March 2007 to 12% in November, the lowest price growth since January 2000.

The SARB echoed property experts’ views that that the moderation in home prices was likely to continue as home buyers feel the pinch of higher interest rates.

But office property demand remained on the rise, with all four major central business districts recording declining vacancy rates from the third quarter of 2006 to the third quarter of 2007, the bank said.

As at the end of September, Pretoria vacancy rates were 3.4% compared with 4.8% the same time last year, Cape Town declined to 5.8% from 5.9%, Johannesburg declined to 15.1% from 17.2% and Durban’s vacancy rate was at 16.8% from 18.5%.

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