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
Characters remaining

    Latest Property News
    • 21 May 2018
      Secure living is one of the growing property trends in South Africa and Nooitgedacht Estate in Stellenbosch certainly ticks the right boxes for buyers who want a secure, exclusive lifestyle in one of the Boland’s most sought-after estates, says Pam Golding Properties.
    • 21 May 2018
      As the impact of technology on the real estate industry becomes more significant, it is clear that there is a need for an objective look at not only traditional real estate models but also online and other alternative low-commission real estate agencies, to examine what they offer and what their impact might be.
    • 21 May 2018
      With sectional titles growing in popularity, an increasing amount of homeowners simply do not have the garden space to install a tool shed in their backyard.
    • 18 May 2018
      Home improvements are a great way to add value to your property, but not all of us have bottomless pockets for a full-on renovation. Lucky for us, there are plenty of affordable DIYs that can spruce things up over a free weekend.
    • 18 May 2018
      The need for large office spaces is slowly eroding as more and more employers choose to allow their staff to work remotely. As a result, the home business model has grown in popularity, with many new entrepreneurs choosing to start their business from home rather than in a business district. But, what are the legal implications of operating a business in a residential area?
    • 18 May 2018
      Proxi Smart Services Pty Ltd, a company that deals with the day to day administration of property transfers while the conveyancer attorneys perform the legal side of transfers, lost its bid for the court to allow them to do business in this regard.
    • 17 May 2018
      If you’re a first time buyer, then you are probably only just beginning to realize how expensive furniture can be. That three-piece lounge suite you’ve had on your “Dream Home” inspiration board probably seems like nothing but an unrealistic fantasy to you now. But, a little bit of financial discipline mixed with a dash of smart shopping can go a long way towards helping you furnish your fantasy.
    • 17 May 2018
      In recent years the demand for sectional title apartments – both for rent and to purchase - in Rivonia, which is considered to be one of the most affluent residential and suburbs in Johannesburg, has been incredibly strong.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us