Residential Property Barometer - January 2015

It was reported that 2015 could see further mild deterioration in Residential and Residential-Related affordability, if FNB’s expectations of  a slightly stronger house price inflation proves true.

John Loos, FNB Property Sector Strategist, reported that indications from 2014 showed a mildly stronger year than that of 2013 and if expectations are met in 2015, the residential property market will strengthen further.

Loos had said that the rate hike which took place in January 2014 had added pressure to the market but despite this the affordability measures remained in a much better condition than it had been back in 2007/8. 

Looking towards 2015 it is believed that certain key factors could cause further mild home and home-related affordability deterioration.

Over the past 3 years, there has been a broad improvement in residential demand relative to supply, reflected in both FNB’s Valuers’ Market Strength Index which continues to rise, as well as in a broad declining trend in the average time of properties on the market prior to sale, as per the FNB Estate Agent Survey.

While this improving market balance, and mounting residential supply shortages, are expected to bring about a resurgence in residential building completions in 2015, it is not expected that this will be in time to prevent slightly higher house price inflation this year. Therefore it is expected that there will be a further acceleration in average house price growth into the 8-9% range.

The slump in oil prices and Global food prices increases the possibility of rate hikes being shifted outwards, therefore it is expected that stronger house price inflation will cause affordability deteriorations in 2015 as opposed to interest rate hiking.

He added that real house price levels (house prices adjusted for consumer price inflation) rose slightly in 2014 as a whole, indicating that housing lost some “price competitiveness” to the competing consumer goods and services last year.

He concluded by saying that in 2015, we can expect a slow affordability deterioration, based on their projection of slightly higher house price growth in the region of 8-9%, and the expectation that average employee remuneration growth will not quite keep pace.

Download the full report here 

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 Jan 2018
      Moving away from the city to a country or coastal town and a slower-paced life is a frequent new-year resolution for South Africans, but thorough research should be done before you break free from the hustle and bustle, because making the wrong move could turn out to be a very expensive mistake, and even more stressful for you and your family than staying in the “big smoke”.
    • 22 Jan 2018
      Cape Town is home to many breathtaking and historic homes, but House Invermark designed in 1969 by South African architect Gilbert Colyn, with inspiration from two modernist icons: the Glass House by Phillip Johnson and Farnsworth House by Ludwig Mies van der Rohe is in a class of its own.
    • 22 Jan 2018
      2017 was a challenging year for the South African property market in general, despite small pockets of thriving activity in areas like the Western Cape. As we head into 2018, Tony Clarke, Managing Director of the Rawson Property Group, casts his eye forward to property trends and market influences that could make their impact felt in the New Year.
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us