Property price growth up, but below peak

House prices, adjusted to take into account the impact of inflation, have declined cumulatively by 20.1 percent since the real house price peak at the end of 2007 but are still 29.3 percent higher than in November 2003, according to FNB.

In nominal terms, house prices have grown by 14.7 percent since the end of 2007 and by 129.3 percent since November 2003.

The outlook for the residential property market for next year is for a continuation of low house price growth.

The latest FNB house price index revealed that nominal house prices increased by 7.2 percent year on year last month compared with the revised 7.1 percent in October.

John Loos, a household and property sector analyst at FNB, said this was the fifth consecutive month of acceleration in year-on-year house price growth since May and continued the relatively solid house price growth that had prevailed since early last year.

In real terms, FNB said, house price growth in October improved to 1.5 percent year on year from 0.7 percent in September.

Loos attributed the rise in real house price growth partly to a decline in consumer price inflation.

However, FNB's residential property price trend differs from that of Absa. Both banks' indices are based on transaction price data from homes they finance.

Absa reported this month that the year-on-year growth in the average value of homes in the middle segment of the market continued to slow down last month.

The year-on-year price growth in small houses declined to 5.8 percent in November from 6 percent in October while for medium houses it slowed to 2.1 percent from 3.1 percent and for large houses to 7.7 percent from 8.2 percent.

Absa said average real house price growth was below 3 percent year on year during October.

The Lightstone residential property price indices, which use repeat sales data, said national house price annual inflation grew to 7.05 percent in October, which was virtually unchanged from the previous month's estimate.

Lightstone said the main benefit of repeat sales, which provide a measure of actual price inflation on houses that had transacted twice in a particular period, was that it was less influenced by the mix of transacting properties.

Loos said FNB had recently considered raising its house price growth forecasts for next year to above the rates experienced this year but it had decided against this because of weak economic growth in the third quarter, ongoing poor consumer confidence levels and some residential propertyrelated statistics suggesting a growth peak forming.

FNB's expectation now was of average house price growth of 6.5 percent for next year.

(Business Report)

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 18 Jun 2018
      Many home sellers are motivated to appoint estate agents because they know that the agency will carry the costs of advertising and marketing their property.
    • 18 Jun 2018
      When a property is sold when it has a tenant in occupation, the questions often raised are: “What happens to the tenant if the landlord sells the property?”, and what rights the tenant will have with regards to cancelling the lease or enforcing it, says Sunell Afrika, rentals manager for
    • 18 Jun 2018
      Sellers are often caught off-guard by the expenses incurred in the selling of a property. Just like there is no such thing as a free lunch, there is also no such thing as selling your property without incurring at least some costs.
    • 15 Jun 2018
      The second quarter of 2018 has proven to be the turning point for Midrand’s real estate market, especially the upper end which started to waver towards the end of a tumultuous 2017 with a notable drop in both sales and average selling prices.
    • 15 Jun 2018
      According to data recently released by FNB, the average age of a South African home buyer has increased from 38 to 44 this year. In an attempt to help first-time buyers enter the market sooner, Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, walks us through the steps of saving for your first home.
    • 15 Jun 2018
      Putting your house on the market can be a stressful process. There are so many decisions to make that will impact how quickly your house is sold and for how much you can sell it for. It’s a serious money game where you can’t afford to make the wrong decision.
    • 14 Jun 2018
      The word tourist describes someone who is visiting South Africa for a limited time and is probably not going to buy a property here – so why is the tourism industry so important to the real estate sector?
    • 14 Jun 2018
      Serengeti Estates has entrenched its status as one of Johannesburg’s most desirable addresses for a spectrum of homeowners with its launch of The Signature Residences, a new cluster village.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us