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Why SA property prices may drop in 2016

Credit ratings agency Fitch Ratings has warned that house prices in South Africa, in real terms, are likely to decline over the next 12 months.

The agency claims real price deflation may affect the property and mortgage markets well into 2017.

Property economist John Loos explained that the real price will depend on economic factors such as GDP growth, consumer confidence, interest rates and job creation.

Listen to the full conversation from The Midday Report with Stephen Grootes:

We could see a sizable real price correction over the next number of years.

John Loos, Property Economist at FNB

Whether it would go into full nominal price decline will depend on how bad the economy gets.

John Loos, Property Economist at FNB

If we get a severe recession, then we might get to a stage of all out price decline.

John Loos, Property Economist at FNB

We're not in good shape at the moment and the housing market is by and large about the economy.

ohn Loos, Property Economist at FNB

This article first appeared on 702 : Why SA property prices may drop in 2016


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