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First National Bank says in its latest property market analytics that there was some flattening out in the recent declining trend in house price growth in March this year. After some slowing in the two middle quarters of 2010, South Africa’s economy appeared to undergo a “mini-recovery” in the summer months.
GROWTH SLIGHTLY HIGHER After a steady decline in the rate of growth of house prices since the mini-peak of 11% in May 2010, March year-on-year growth of 0,7% was marginally higher than the revised 0,6% recorded in February. FNB says the index pointed to some flattening in the declining trend. In real terms the decline continues.
MINI-RECOVERY Over the past month the picture from high frequency data releases has been one of improving economic growth. The Reserve Bank’s leading indicator grew strongly in December and January. The manufacturing sector – as represented by the Kagiso Purchasing Managers’ index – has been recovering. It’s possible the first quarter experienced economic growth of around 4,4%.
IMPROVEMENT IN INDEX The FNB valuers’ residential market strength index – aggregate demand rating, minus aggregate supply rating – has improved slightly. This index is compiled by valuers providing a rating of demand as well as supply for property in a specific area. Supply is then subtracted from demand to obtain the index. The market strength index remains unbalanced in favour of supply.
INFLATION DANGER FNB says high oil and food prices are just starting to feed into SA’s inflation measures, with the producer price inflation rate for imports having risen to 4,8% from a low of 0,7% in December 2010, taking the overall producer inflation rate to 6,7% in February. That’s up from 5,5% in January. Higher producer inflation is a harbinger of consumer inflation – and higher interest rates.
GROWTH SLIGHTLY HIGHER After a steady decline in the rate of growth of house prices since the mini-peak of 11% in May 2010, March year-on-year growth of 0,7% was marginally higher than the revised 0,6% recorded in February. FNB says the index pointed to some flattening in the declining trend. In real terms the decline continues.
MINI-RECOVERY Over the past month the picture from high frequency data releases has been one of improving economic growth. The Reserve Bank’s leading indicator grew strongly in December and January. The manufacturing sector – as represented by the Kagiso Purchasing Managers’ index – has been recovering. It’s possible the first quarter experienced economic growth of around 4,4%.
IMPROVEMENT IN INDEX The FNB valuers’ residential market strength index – aggregate demand rating, minus aggregate supply rating – has improved slightly. This index is compiled by valuers providing a rating of demand as well as supply for property in a specific area. Supply is then subtracted from demand to obtain the index. The market strength index remains unbalanced in favour of supply.
INFLATION DANGER FNB says high oil and food prices are just starting to feed into SA’s inflation measures, with the producer price inflation rate for imports having risen to 4,8% from a low of 0,7% in December 2010, taking the overall producer inflation rate to 6,7% in February. That’s up from 5,5% in January. Higher producer inflation is a harbinger of consumer inflation – and higher interest rates.
