Western Cape house price growth slows, remains ahead inflation
The Western Cape’s Q4 2016 year-on-year average house price growth was 8%, according to FNB House Price Indices. The country’s star performer has slowed for three consecutive quarters from a 10-year high of 10.6% reached in Q1 2016.
“It is likely that, after a recent period of very strong house price growth in the Western Cape, a mounting affordability challenge in the region, especially for aspirant first-time buyers, has started to put some brakes on demand growth,” said John Loos, FNB’s household and property sector strategist. “Since the beginning of 2010 (the start of the post-2008/09 recession recovery), the average house price for the Western Cape has risen cumulatively by 76.6%. By comparison, the next strongest growth was in KwaZulu-Natal, with a far more moderate 45.3% and Gauteng with 41.3% over the same period.”
The Western Cape remains the most expensive major region by far, with an average estimated house price of R1,411m, the next most expensive region being Gauteng with an average price of R1,042m.
“At the other end of the average house price growth scale, the Eastern Cape is the weakest with year-on-year decline of -2.9% as at Q4 2016, while KwaZulu-Natal and Gauteng registered low positive growth of 1% and 1.2%, respectively,” said Loos. “The FNB House Price Index for the five smaller provinces, too, showed only 1.2% year-on-year growth in Q4 2016.”