Home / News  / House price growth remains below 4% YoY – FNB

House price growth remains below 4% YoY – FNB

selling a house costs resize

The FNB House Price Index (HPI) kicked off the year on a mildly lower note, averaging 3.7% year-on-year (YoY) in February, below the 4% YoY recorded in January and the 3.9% annual average for 2018.

This is according to Siphamandla Mkhwanazi, FNB economist, who said this was against our CPI inflation expectation of 4.2% YoY in the same period. Month-to-month, the FNB HPI accelerated to 0.27%, up from 0.15% in January.

As has been the case since February 2016, house prices remain mildly below CPI inflation, although January recorded a better outturn (-0.02% versus -0.38% in December). This slight improvement was, however, solely driven by benign inflation rather than house price appreciation.

FNB valuers perceive the slowing activity to have continued into 2019

FNB’s valuers rate current residential housing demand as weakening and supply strengthening. Consequently, the FNB Valuers’ Market Strength Index weakened further in February, pointing to deteriorating demand-supply balance. The FNB Residential Demand Rating declined by 1.8% on a YoY basis while the FNB Housing Supply Rating continued its ascent, recording a 2.2% rate as at February 2019. These movements in demand and supply translate into a further decline in the FNB Market Strength Index by 2.2% YoY, to reach a reading of 49.51, keeping it below the 50-mark for the ninth consecutive month. This below-50 reading means that valuers rate residential supply as stronger than demand.

These trends aptly explain the declining real house prices and suggest that the market remains slightly in favour of buyers. Indeed, the FNB Estate Agents Survey results show that between 2016 and 2018, the proportion of properties sold below asking price averaged 91.6%, compared to an average of 85.2% three years prior.

hometimes@pixelbaste.com

Review overview
NO COMMENTS

POST A COMMENT