South African house prices surged an annual 13 percent in November as the number of loans for less expensive homes declined, said Standard Bank Group Ltd. (SBK), Africa’s biggest lender.
Nominal house prices gained after dropping 2.5 percent in October, the Johannesburg-based lender said in an e-mailed statement today. South Africa’s inflation rate was 12.4 percent in October.
“The jump is not the result of higher house prices but rather the outcome of fewer lower-priced houses financed by Standard Bank,” economist Johan Botha said in the statement. “Clearly, middle and lower-income households find economic and financial conditions extremely challenging.”
The central bank has raised its benchmark interest rate six times since June last year to 12 percent as inflation climbed above the 3 percent to 6 percent target range. House prices dropped a record 13.2 percent in May, according to Standard Bank, which has a market share of about a third of South African home loans.
Standard Bank calculates the index from the median house price of mortgage applications it receives, which it estimated was 650,000 rand ($62,500) in November.
Absa Group Ltd. (ASA), South Africa’s biggest mortgage lender, said on Nov. 6 nominal house prices rose 1.2 percent in October from a year ago, the slowest pace in more than 15 years. Its index is based on the average house price, which was estimated at 969,100 rand in October.
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