Residential property market improving - FNB

Signs were emerging of growing residential market strength, according to FNB.

While year-on-year growth in house prices was still slowing in the first quarter of this year because of the high-base effect of a year ago, quarter-on-quarter house price growth had just started to show early signs of improvement in the first quarter of this year, John Loos, a household and property sector analyst at FNB, said yesterday.

The FNB house price index has risen by 19.1 percent since May 2009 until last month. May 2009 is the month that marked the end of the period of significant house price deflation linked to the 2008/09 recession.

However, Loos said the increase in house price growth, adjusted to take account of the impact of consumer price inflation, over this "post-recession" period until February this year was a mere 0.3 percent.

The FNB house price index for last month slowed further in its year-onyear inflation rate to 2.2 percent from a revised 2.9 percent in February.

Loos said this continued a mild slowing growth trend from a "minipeak" of 7.7 percent growth reached in July last year. He added that a relatively solid period of house price growth in the first half of last year created a high-base effect, and it was this high and rising base effect that was a key contributor to low and slowing year-on-year growth in the early stages of this year.

Loos stressed this slowing year-onyear house price growth did not yet reflect what appeared to be some signs from other FNB indicators of growing residential market strength. These included perceptions by estate agents in FNB's estate agent survey that residential demand improved noticeably in the first quarter of this year, while the percentage of agents citing residential stock constraints also increased, suggesting an improved balance between demand and supply.

However, Loos said they had not yet seen sustained declines in the "stilllengthy" estimated average times that properties remained on the market before being sold, or in the percentage of sellers having to drop their asking price. But he stressed that should higher demand and significant stock constraints be sustained, such declines could ultimately be expected to occur.

Loos said FNB's house price index improved quarter on quarter to mildly positive growth in the first quarter of this year, after a brief decline in the previous quarter. He said a further acceleration was expected in the second quarter, which would translate into a rise in year-on-year price growth at a later stage this year.

(Business Report)

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Mar 2018
      If a landlord opts to use a managing agent for the rental of his or her property, the inspection process can be easier as the agent is not emotionally involved and will certainly have concluded an in-depth inspection report in the interests of all parties.
    • 19 Mar 2018
      We all wish we could have the cheat sheet for selling a property – a simple Ctrl+Shift+C code that will magically secure an offer on your home in an instant. Though it is not possible to provide you with this cheat code (sadly, reality does not come with such perks), it is possible to provide you with a list of the most common blunders some of your neighbours have committed in their efforts to sell their homes
    • 19 Mar 2018
      Although property technology is now widely accepted as an established trend, especially in the international real estate arena, the industry has been cautious to advance and smaller markets like South Africa are still hesitantly dipping their toes in the water.
    • 16 Mar 2018
      Strange as it may seem, there is a stock shortage looming now in the luxury sector of the Johannesburg property market, because astute buyers have for the past few months been hurrying to snap up high-end homes being offered at excellent prices.
    • 16 Mar 2018
      No one likes having to claim but having insurance for your household contents is vital, and at the start of a new financial year, homeowners either applying for new household insurance or revising their existing insurance should take a comprehensive inventory of their possessions and keep track of the total value.
    • 15 Mar 2018
      First-time buyers typically need to save for at least three years to afford the deposit on a home, and the VAT and fuel price increases announced in this year’s budget are going to make it even more difficult for them to reach that goal.
    • 15 Mar 2018
      Sea Point shows how developers use these organisations to advance their own interests
    • 15 Mar 2018
      As the rand strengthens against other major currencies, the prospect of investing in properties abroad is an increasingly appealing option for South African investors. Several factors, local and international, are sending a clear message: now is the time.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us