Share

Property market picks up after election, but not enough

Activity in the residential property market has picked up after the elections, although not enough to counteract the decline in the months before.

This is according to the latest FNB Property Barometer released on Tuesday.

The FNB House Price Index for June ticked in at 3.5% year-on-year (y/y), compared to 3.3% reported in May. This takes the average half-year nominal house price growth to 3.4%; marginally lower than the 3.5% y/y recorded in the same period in 2018.

However, in real terms (taking inflation into account) house prices continued to decline. FNB regards this as a continuation of a downward adjustment of house prices in line with lackluster economic activity and lower disposable income levels. 

In the low-income market segment, the average house purchase price was R395 900 in the first quarter of 2019. In the lower-middle segment it was R638 200, in the middle segment R935 000, in the upper-income segment R1.3m and in the luxury segment R2.3m.

FNB expects some activity to recover in the second half of the year due to the combination of expected lower interest rates and some improvement in buyer sentiment.

The index also provides details on trends in specific cities.

City of Johannesburg

Data for the first quarter of the year shows the average house price growth softened further to 2.1% y/y, from 2.9% in the fourth quarter of 2018.

This is the 13th consecutive quarter of decelerating house price growth in the city and higher-priced areas are more severely affected, according to the report.

House prices have even begun to fall in the Sandton area - the most expensive region in the city - registering a 1.7% y/y decline in the first quarter.

Soweto remains the best-performing sub-region in Johannesburg, although the average house-price growth has slowed noticeably over the past 12 months from a peak of 14.3% y/y in the first quarter of 2018 compared to 4.7% in 1Q19.

City of Tshwane

The City of Tshwane's estimated average house price softened further to 1.5% y/y in 1Q19, down from 1.9% reported in 4Q18.

The overall house price growth in the city is impacted by the fall in more affluent regions, with prices in Pretoria East and Centurion down by 0.01% and 0.8% y/y respectively in 1Q19.

In contrast, the northern sub-regions of the city  primarily comprised of middle and low-income areas – are trending upwards to 6.9% y/y in 1Q19, compared to 5.5% y/y in 4Q18.

City of Cape Town

Most sub-regions in the city are experiencing slowing house price growth, with the most expensive regions even experiencing house price deflation.

According to the report, there is scope for further downward adjustment in Cape Town house prices and a nominal decline in prices is conceivable at this point.

City of eThekwini

The City of eThekwini is performing better than all the major metros in SA, with the average house price growth of 5% in 1Q19.

Areas in the northern parts of the city, closer to the airport, are doing particularly well.

Excluding low-income areas – the North Coast inland region which includes areas such as Tongaat and Redcliffe  has registered the highest cumulative 5-year growth in the metro, at 41% versus the metro average of 31%.

Growth in the sub-region has been supported by new developments in the area, according to the report.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.90
+0.2%
Rand - Pound
23.85
+0.2%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders