FNB house price index increases

The FNB house price index showed mild acceleration in its year-on-year average house price in June, from a revised 6.2 percent in May to a 6.6 percent rate in June, the financial services group said on Tuesday.

"The renewed acceleration in house price growth, which resumed early in 2013 after a lull late in 2012, continued in the June version of the FNB house price index," the group said in a statement.

In real terms, adjusted for consumer price inflation, as at May there was a "very slight" year-on-year increase of 0.61 percent, with consumer price inflation at 5.6 percent year-on-year in that month being slightly lower than house price inflation.

The index's average price of homes transacted was R891,266.

In real terms the index was 18.6 percent down on last decade's real price peak reached in November 2007.

In nominal terms, prices were 15.7 percent higher.

"However, compared to June 2003, 10 years ago, the index is up 44.8 percent in real terms and 148.8 percent in nominal terms," the group said.

"(This suggests)... that the price effects of last decade's residential demand boom have far from worn off, despite a significant downward real correction since late-2007."

The group said that despite the recent improvement, the housing outlook could still remain mediocre, with the economy under "significant pressure".

It said the key release in June was the SA Reserve Bank's (SARB's) Quarterly Bulletin, which confirmed that real household disposable income growth had slowed further in the first quarter from the prior quarter's 2.4 percent quarter-on-quarter annualised rate, to 2.2 percent.

"This has a bearing on residential buyer purchasing power growth, and largely explains the recent steady deterioration in consumer confidence in recent quarters," it said.

"The current level of interest rates set by the SARB is at multi-decade lows, and indeed the stability of interest rates at these low levels has helped to gradually strengthen residential demand through 2012 and early-2013."

The group said it was, however, "questionable" whether this strengthening of residential demand could continue at a time of "clear economic weakness".


  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 22 Jun 2018
      The rental market in many Johannesburg suburbs has shown encouraging signs of revival this year but it remains a competitive market and landlords who best cater to their market’s needs will reap the healthiest returns.
    • 22 Jun 2018
      Home design is constantly evolving to reflect the changing needs of society. We look at some of the ways in which our use of space is changing.
    • 22 Jun 2018
      While estate agents can help the seller with correctly pricing the property and marketing a property to the right pool of potential buyers, at the end of the day it’s the impression that the property will make on buyers that counts the most.
    • 21 Jun 2018
      Anyone who’s ever been involved in a building project that’s gone wrong will appreciate the importance of adequate insurance cover in the construction industry.
    • 21 Jun 2018
      A recent news story about a blind tenant caught in a legal battle with his body corporate over letters and notices he was unable to read and consequently comply with has raised the question: what are the legal obligations for landlords with disabled tenants?
    • 21 Jun 2018
      A trend that’s taken the world by storm in recent years is that of hygge (pronounced: hue-guh), a Danish concept that is about creating intimacy, connecting with loved ones and taking pleasure in small, ordinary things.
    • 20 Jun 2018
      Buying or selling real estate isn’t as easy as it is portrayed sometimes, especially if there is a death of a party during the transaction which can make it awkward, tricky and inconvenient.
    • 20 Jun 2018
      With interest rates remaining at historic lows and banks continuing to compete for mortgage finance business, first-time buyers with funds at their disposal are currently well-placed to gain that initial foothold on the property ladder, particularly in the light of the slightly lower growth rates currently experienced in residential property values.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us