House prices rose 7.4% year-on-year according to the FNB House Price Index for June 2016. This is slightly faster than the revised 7.2% rate recorded for May, extending the recent mild accelerating trend in average house price inflation to five months.
“Examining house price inflation on a month-on-month basis suggests that a period of slightly better, or slightly ‘less weak’, economic performance during Q2 2016 may have in part fuelled slightly stronger house price growth,” said John Loos, FNB household and property sector strategist. “But the main driver of the accelerating national average house price inflation rate of late appears to be the Western Cape province, with a Q2 year-on-year house price growth rate of 12.1%, while the other major provinces languish in single-digit price growth territory.
“Sentiment in and toward the Western Cape appears very positive at present, the region having created a perception of good economic management along with a good lifestyle, thus attracting significant interest from repeat home buyers from other provinces.”
Photo: The highly popular Val de Vie Estate in Paarl, Western Cape.