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Residential property price inflation slows to 5.3%. Further weakness expected

The average house price rose 5.3 percent year-on-year in March, according to the FNB House Price Index, down from 5.6 percent growth in February and continuing the slowing trend of recent months.

The average price achieved for homes in March was R994 718.

Real house price growth

When taking the Consumer Price Index into account (3.9 percent in February, the latest available data) “real” house price growth amounted to 1.7 percent.

According to FNB Household and Property Sector Strategist John Loos, real house prices are, on average, 17.2 percent lower than the peak reached in December 2007.

However, real house prices are 66.2 percent above the level reached in January 2001.

Outlook

“We started the year expecting an eight to nine percent average house price increase for this year, but now expect an average nearer to five percent,” says Loos.

Listen to the audio for more detail.

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