select
|

Year-on-year house price growth has steadily slowed over past 7 months

According to the latest report from FNB, the House Price Index continued to cling onto low positive year-on-year growth during November 2016

However, the rate of year-on-year growth has been slowing steadily, and on a month-on-month basis the index has already been in mild deflation for the past 4 months.

FNB says that this weakness was not too surprising, given other FNB non-price indicators that have for some time been pointing to weakening demand and residential activity levels. 

After a lengthy period of weakening “signals” in the housing market dating back into 2015, the slowdown in year-on-year house price growth has “sped up” considerably. Year-on-year, house price growth still shows slightly positive readings, but on a month-on-month basis the FNB House Price Index has had a 4th month bout of deflation.

The readings of the index are not too surprising, given the multi-year stagnation in the South African economy to where growth this year is likely to have been near to zero. The lagged impact of interest rate hiking, too, is probably still filtering through. 

On top of this, recent readings of the FNB Consumer Confidence Index have pointed to consumers expressing concern regarding future economic performance. While they expect the alleviation of drought conditions to boost agricultural growth in 2017, and some support from mildly better export commodity price to assist mining, our forecast economic growth rate of 1% is unlikely to make a meaningful difference to residential demand. 

We therefore expect little in the way of residential supply constraints in 2017, resulting in a year of low house price inflation averaging near to 3%. This would translate into an average house price decline in real terms for 2017, when adjusting for CPI inflation.

Download the full report here : Property Barometer November 2016



  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
        
    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