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
    • 17 Nov 2017
      FWJK has announced the launch of its latest residential brand, the Lil’ Apple, which will be launched simultaneously in two developments in Cape Town and Umhlanga totaling 600 apartments. The Lil’ Apple is set to be a brand of FWJK’s New York style apartments which will be rolled out nationally.
    • 17 Nov 2017
      It’s been a tumultuous year on many fronts, with socio-political uncertainty setting the tone for much of South Africa’s economic activity yet despite this and seemingly counter-intuitively, the residential property market has held up well.
    • 17 Nov 2017
      The EAAB (the Estate Agency Affairs Board) recently claimed that around 50,000 illegal estate agents could currently be operating illegally.
    • 16 Nov 2017
      Penthouses are synonymous with New York – characterised by high-rise living that is decidedly luxurious and spacious. While exclusivity comes at a price, you can still create a “penthouse” look and feel in your existing apartment or even the upstairs bedroom of a double storey house with some clever design changes and styling touches.
    • 16 Nov 2017
      The area has long been popular with kite surfers and, with escalating property prices in Cape Town itself, is increasingly in demand with home owners who work in town, but are looking to invest in more affordable properties.
    • 16 Nov 2017
      Cape Town’s popularity as a world-class tourist destination has resulted in a spike in the number of homes available for holiday lets and fuelled investor demand for sectional title units with short term rental potential.
    • 15 Nov 2017
      Sappi, one of South Africa’s oldest global companies and a leading global supplier of sustainable woodfibre products, has moved its global and regional headquarters to a new site on the corner of Oxford and 14th Avenue in Rosebank.
    • 15 Nov 2017
      There’s an old saying in real estate that you should seek to make a profit when you buy, not only when you sell – and a large part of succeeding at that endeavour is buying a home in an area with desirable features that will enhance the resale value of your property.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us