Average house price growth to decline for third year in a row

The average year-on-year house price growth for this year was likely to be slower than last year, despite year-on-year house price growth accelerating mildly in recent months.

John Loos, a household and property sector strategist at FNB, said yesterday that this would represent the third consecutive year of slowdown in house price growth.

"Average house price growth for 2017 as a whole will not be far above 3 percent, down from an average 4.7 percent in 2016 and a multi-year high of 7 percent reached in 2014," he said.

Loos said FNB's expectation at the beginning of the year had been for a 3 percent average house price growth this year.

In real terms, the gradual correction in house prices continued in October this year, with the real rate of house price change remaining mildly negative at a -0.4 percent yearon-year decline.

Loos added that real house prices on a cumulative basis were in October -19.9 percent down on the December 2015 high. However, he said that despite a mediocre performance in recent years, when looking back further the average real price currently remained a massive 65 percent above the end-2000 level 17 years ago.

Without adjusting for inflation, average prices last month were 318.26 percent higher than the end-2000 level. Loos said consumer goods and services prices, as measured by the CPI, were by comparison only 156.69 percent higher over virtually the same period.

FNB reported yesterday that its house price index for last month rose by 4.6 percent year-on-year, which was a mild further acceleration from the revised 4.4 percent growth recorded in October this year.

In real terms, the gradual correction in house prices continued in October this year, with the real rate of house price change remaining mildly negative at a -0.4 percent yearon-year decline.

However, Loos said this was a reduction in the real house price deflation rate from -0.9 percent year-on-year in September this year and from a low of -4.8 percent reached in December last year.

Loos attributed the diminished real price decline in October this year partly to the acceleration in the year-onyear house price inflation rate to 4.1 percent in October from 4.4 percent in September.

He added that a decline in CPI inflation from 5.1 percent year-on-year in September to 4.8 percent in October also assisted in curbing real house price decline.

The average price of homes transacted in September was R1 103 092.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 May 2018
      Extreme weather appears to be the new normal, evident by the volume of insurance-related disputes reaching the industry watchdog’s desk. To avoid a situation in which your insurer refuses to pay up, you should proactively ensure that your home is well-maintained and ready for whatever winter has in store.
    • 22 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.
    • 22 May 2018
      According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, dealing with some sort of neighbour dispute is an unavoidable part of life unless, perhaps, you choose to live on a remote small holding for the rest of your life.
    • 22 May 2018
      Buyers feel that they are getting value for money in the Northcliff area without having to compromise on aesthetics and amenities
    • 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
      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?
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us