Johannesburg - The FNB House Price Index showed a further slowing in its year-on-year (y/y) growth rate in August, from a revised 7.8% rate in July to 6.6% in August, the financial services group said on Monday.
"The further slowing in the year-on-year growth rate is more or less in line with our expectations, as we have seen increasing evidence of a 'soft patch' in both the global and domestic economy as the year has progressed," the group said in a statement.
In real terms, adjusted for consumer price inflation, as at July the index showed a slight y/y growth, slowing from 2.85% in the previous month to 2.76%.
The slowing in real house price growth was limited by a significant further decline in consumer price inflation from June's 5.5%, to 4.9% in July.
The index's average price of homes transacted was R865 900.
This meant that since the boom period real house price peak reached in February 2008, real house prices (house prices adjusted for CPI inflation over the period) were 13.6% lower at July 2012.
In nominal terms, prices were 14.2% higher than February 2008, as at August 2012.
However, compared to price levels at the inception of the FNB House Price Index in July 2000, real prices were still 68.4% higher as at July 2012, while nominal price levels were 230.9% higher in August 2012.
FNB said its valuers perceptions of market strength, as encapsulated in the FNB Valuers Market Strength Index, were increasingly supportive of the slowing price growth trend as measured by the FNB House Price Index.
In August, the FNB Valuers Market Strength Index rose slightly further, from a previous level of 45.64, to 45.73, indicating that the valuers as a group still perceived a slight narrowing of the gap between supply and demand.
"This slowing growth comes as little surprise given signs of global and domestic economic weakness that have been building for some time," FNB said.
The group anticipated further slowing in the y/y rate of increase in house prices, with the FNB House Price Index expected to end the year on lower y/y growth of between 3% and 5%.
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