Fin24.co.za - South Africa
South African houses prices will be 60% more expensive in the next five years, a senior official at banking group ABSA said on Tuesday.

"In five years' time property is expected to be about 60% more expensive than today, taking into account annual growth of 10% over this period," said Gavin Opperman, managing executive of ABSA Home Loans.

This is the first MLA e-newsletter of 2008.  Firstly, we wish you all the best for this year.  While conditions are tough the property market appears stable.  It is positive that the Reserve Bank has kept the key repo rate unchanged, as per our main story.  From a business perspective it is important to look beyond the power cuts and other negative aspects which we are experiencing and remain focused on our business goals.  We remain committed to offering the best possible service.  Have a good year.

As a keen observer of property and lifestyle trends, I'm constantly fascinated by my fellow South Africans' home buying decisions.

What makes one suburb more desirable to live in than the next? Why do some aspire to live in a beachfront bungalow in Clifton while others prefer the genteel atmosphere of leafy Constantia? Why choose to live in shabby but chic Melville if you can afford the "mink and manure" belt of Inanda? And to what extent do investment returns play a role in suburb selection?

But whether you're choosing a primary abode or a buy-to-let property, bricks and mortar acquisitions do require a huge financial outlay. More so given how rapidly house prices have escalated over the past five years. So you assume - rightly or wrongly - that homebuyers would tend to gravitate towards suburbs that have over time delivered above average capital growth, irrespective of whether they're lower, middle or high-income areas.

Admittedly, financial considerations often play a major role in where people decide to live. So too is proximity to the workplace. But there seems to be plenty of other more important factors that drive property-buying trends

Gre