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Western Cape loses half its growth in one year

price cut resizeThe Western Cape’s year-on-year house price growth for Q2 2017 measured 5.7% – down from Q1 2017’s 6.9%, and significantly slower than the 10.8% high recorded in Q1 2016.

This is according to the FNB House Price Indices for the country’s major regions, which pointed out that while the Western Cape was slowing, it still remained well ahead of the other metro regions: Gauteng was 2.3% and KwaZulu-Natal 2% in Q2 2017.

“The greater support for the Western Cape housing market in recent years, however, is believed to have come from a very strong net inflow of repeat home buyers from elsewhere in South Africa – a source of support which other provinces don’t have nearly as much of,” said John Loos, FNB household sector strategist. “However, we believe that the time has come for the Western Cape’s housing market to cool off, and indeed the gradually slowing average house price growth rate for that province appears to pointing to such a cooling off emerging.

“This region’s market is the most expensive in South Africa, with an average transaction price estimated at R1,437m in Q2 2017 – the next highest average price being that of Gauteng at an estimated R1,050m.”

According to the FNB Major Metro House Price Index for Q2 2017, Nelson Mandela Bay posted negative growth of -2.7% year-on-year, Ethekwini +2.8% and the City of Cape Town +7.9%.

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