This is according to John Loos, FNB’s household and property sector strategist, who said in real terms (when adjusting for consumer price inflation) the rate of house price change remains in negative territory, having recorded a -5.3% year-on-year decline in January.
“The magnitude of this house price deflation in real terms has begun to represent a noticeable house price ‘correction’ of late,” said Loos, noting that since December 2015, the average real house price has declined by -5.6%. “Examining the longer term real house price trends, we see that the recent ‘correction’ has wiped out all post-2008/9 recession gains. The real house price level as at January 2017 was 0% different from the November 2011 post-recession real price low.”
While the average real house price level is now -23% below the all-time high reached in December 2007, it currently remains 59.9%% above the end-2000 level.
“We therefore still regard current real price levels as very high,” said Loos. “In nominal terms, when not adjusting for CPI inflation, the average house price in February 2017 was 297.5% above the end-2000 level.”
Top photo: Up-market Sandton Country Club Estate five-bedroom home is available through Jawitz Properties for R22m. Click here to view the listing