SA homeowners face huge loss as price gap on homes hits record high.
The price gap between building a new home and buying an existing one reached a record level at the end of 2011 following steep rises in the costs of labour and materials. As a result, an increasing number of South African homeowners may be leaving themselves exposed to huge financial loss should damage be caused to their property.
The latest housing review released by Absa showed that it was 34.5% cheaper to buy an existing home in the fourth quarter of last year than to have a new home built. This is the widest the gap has been since the survey began, beating the previous record of 33.8% 12 months earlier. According to the review, the price of building a new middle segment house rose 6.6% to R1.52 last year while the price of an existing house in this segment rose 1.8% to R1.04m.....read more
