Johannesburg - Real house prices have dropped almost 15% since they reached a high point in February 2008, according to the FNB House Price Index released on Monday.
"The
cumulative downward adjustment in real house prices from the high of February
2008 to June 2011 measures -14.7%," said FNB Home Loans strategist John
Loos in a statement.
February 2008 was the highest point in real terms - adjusted for consumer price inflation - in the FNB House Price Index's 11-year history.
"Since then the market has had a very tough economic period, and has been relatively weak," Loos said.
However, the index showed a mild acceleration in the year-on-year growth rate in recent months.
In June the growth rate was 3.1% year-on-year and in July it was 4.6% - the highest rate of growth since August 2010.
"In real terms, however, when adjusted for consumer price inflation, the year-on-year growth rate for June still remained in negative territory to the tune of -1.8%."
Loos said this was in part due to rising consumer price inflation, which reached five percent in June.
He said the acceleration in the year-on-year rate of house price inflation could be a lag effect of the mild increase in residential demand in summer, and of the two basis point interest rate cuts late in 2010.
"The cumulative picture since July 2000 (the starting point of the FNB index) however still remains impressive, with the June 2011 real house price level 66.2% higher than exactly 11 years ago, and the July nominal price level 211.6% higher than in June 2000."
However, a weakening global and domestic economy could dampen future demand.