select
|

Is the South African property market slowing down?

Everyone always wants to know whether house prices are increasing or decreasing, but different statistical reports are making it quite difficult at the moment to gauge which overall direction the South African property market is taking.

According to the FNB House Price Index, for example, the average house price showed year-on-year growth of 8% in April - which was slightly less than the 8,1% Year on Year growth recorded in March.

In addition, this index shows that real or after-inflation house price growth came in at 1,93% Year on Year in March, compared to 2,3% Year on Year in February, with the decline being mostly due to an increase in inflation.

But the ABSA House Price Index revealed a different pattern, with nominal Year on Year growth in respect of middle-segment small, medium-sized and large homes rising in April to 10%, 7,8% and 8,9% respectively - compared to 8,1%, 7% and 8,8% in March.

In real terms, this index also shows year on year growth in March of 2%, 0,9% and 2,6% in the prices of small, medium-sized and large homes, compared to -0,1% 0% and 2,7% in February - meaning large houses were the only ones to lose ground that month.

"However, their forecasts are actually not so different" says Berry Everitt of the Chas Everitt Property Group.

"FNB anticipates that while price growth will continue, it will do so at a slower pace as 2014 progresses, while ABSA says negative trends in and prospects for the economy, household sector finances and consumer confidence are all expected to be reflected in the performance of the residential property market, and that only single-digit nominal house price growth is forecast for 2014."

The bottom line is that while there is still high demand, and the banks are still more willing to lend, times are tough and it is getting harder for prospective buyers to meet their criteria with regard to deposits and disposable income levels, so they will continue to be very value conscious.

"And what this means for South African Property purchasers, both homeowners and investors, is that while the value of their properties will grow, big gains are not on the cards this year, so if they want to sell, they need to price very carefully" Everitt concludes.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK