House prices remain in negative territory, up to 4% growth for 2018
In June, house prices grew by 4.1% year-on-year, up from May’s 3.9% and February’s 2.9%. But when adjusting for consumer price index (CPI) inflation of 4.4% in May, house prices remained in negative territory at -0.5% year-on-year.
This is according to FNB’s household and property sector strategist, John Loos, who said that house prices have increased in real terms by 90.8% since 2001.
“More recently, following the mild post-2008/9 recession recovery, real house prices have declined cumulatively by -2.6% since a 9-year high reached in February 2015,” he said. “The signs are increasingly pointing to an even slower average house price growth year in 2018, than in 2017, and possibly the fourth consecutive year of house price growth slow down, despite a recent mild growth acceleration.
“Whereas we had expected a little more early in 2018, originally projecting an average 5% to 6% house price growth rate for the year, the short-lived nature of that early-2018 national sentiment “spike” leads us to adjust our average house price expectation for 2018 lower into the 3% to 4% range.”