PREMISES PROMISES
PROPERTY INVESTMENT: New houses hard on the pocket
Price gap between new and old houses reach record high
If you want to build your dream home from scratch instead of buying an existing one, be prepared to fork out at a whopping 45% more. That translates into an additional R629,500 if one takes the average-priced and -sized home as a benchmark, according to latest figures from Absa. The bank’s housing review for the third quarter shows that the cost differential between new and existing homes has risen sharply over the past 12 months following rapidly rising building and land costs. The average price of a new house rose by 16.1% in the third quarter year on year to R2,020,200. In contrast, the average price of an existing house increased by only 3.5% in the third quarter to about R1,390,700. Absa Home Loans housing analyst Jacques du Toit says an acceleration in building cost inflation and higher vacant land values over the past six months or so may have contributed to much higher price growth for new houses. At the same time, nominal year-on-year growth in the average price of existing...
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