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FNB Property Barometer – House Prices By Size

The latest report from FNB indicates that home buying is still very much about size - and right now bigger is not better, as the reports show that smaller homes are outperforming their larger counterparts.

FNB uses 3 size categories, namely the Small-Sized segment (homes 20-80m²), Medium-Sized Segment (homes 80-230m²) and the Large-Sized Segment (homes 230-800m²)

The reports show that house price inflation rates for the 3 different segments continue to differ significantly. In the small-sized segment, where the average home price is R619,244, price inflation was running in double digit territory (12.5% during the 2nd quarter of 2016.)

In the medium-sized segment, where the average price was R1.106 million, a 6.6% year-on-year price inflation. This reflects a slight deceleration from 7.5% in the 1st quarter of 2016. 

Next in the large-sized segment, where the average price is R1.961 million, the inflation rate slightly accelerated in the 2nd quarter from the previous quarter’s 1.4% year-on-year to 4.6% in the 2nd quarter. This segment is still underperforming against the other two.

It is expected to remain like this in the coming years, with household finances remaining constrained in what is believed to be the “stagnating” phase of South Africa’s economic super-cycle. This is expected to sustain the long term densification trend around the country’s major urban areas, with the move towards a property stock composition including a far greater portion of small-sized homes on smaller average stand sizes in years to come.

Read the full report


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