select
|

FNB Property Barometer - Lower property price growth forecasted

The latest FNB House Price Index for 2015 as a whole showed an average growth of 6% and continues the steady downward trend from 2014 and will continue in 2016. 

FNB said that they believe that recent mild uptick in year-on-year house price growth late in 2015 will be short lived, and 3 months of slowing month-on-month house price growth, already, suggests that this will probably be the case.

Adding that they rather, believe that the slower overall average house price growth rate in 2015, compared to 2014, was the start of a broader trend towards low single-digit house price growth in the near future, and that the 2nd half of 2015 “bump” in house price growth was temporary.

And although oil prices remain well-behaved, a weak rand and a drought-driven rise in food prices are adding to the economic pressures and not overly-positive economic prospects as we head into 2016. South Africans should also prepare for a lift in CPI inflation which would lead to the SARB to continue to hike interest rates gradually further through 2016. It can be said that the performance of the residential property market in 2016 will be inextricably linked with the performance of the economy.

Rising interest rates, along with depressed export commodity prices, is expected to lead to still further slowing in real economic growth from an already stagnant rate of around 1.5% last year.

With the risk of recession significant, and slow positive growth appearing to be the best scenario, there appears little to support average house price growth at recently positive real rates as we enter 2016. 

FNB therefore sees a move slower in year-on-year house price inflation towards the 4-5% range later in 2016.

Read the full report here


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 20 Feb 2018
      Owning a home is a milestone that most South Africans aspire to. Becoming a homeowner is a step towards growing personal wealth and owning an asset that appreciates in value over time, provided of course that the correct principles are applied during the buying stage of the process, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 20 Feb 2018
      The suburb of Greenstone in Johannesburg east came to be over the last two decades. “In the beginning, it was literally just a hill with not so much as a shopping centre,” says Michael Levy, Property Consultant at Jawitz Properties Bedfordview. Today it has plenty shopping facilities and is fully built, boasting high-density, upmarket housing and residential estates, though still has a few pockets poised for commercial development.
    • 20 Feb 2018
      A major shift in the ageing paradigm has precipitated an equally dramatic transformation in the retirement sector, with modern accommodation options worlds away from the conventional model.
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK