Growth in S.Africa’s housing prices is slowing

While the November year-on-year house price growth rate was higher than the previous month‚ the difference has become small, according to FNB household and property sector strategist John Loos.

Although South Africa’s house prices rose for the fifth consecutive month in November‚ FNB says house price growth may be losing some momentum.

The FNB house price index edged up to 7.2% last month from a revised 7.1% in October. The average house price‚ according to transactions financed by FNB‚ was R907‚182.

"While the November year-on-year house price growth rate was higher than the previous month‚ the difference has become small‚ which may be a sign that the recent house price growth acceleration has started to lose momentum‚" FNB household and property sector strategist John Loos said.

Since the real house price peak at the end of 2007‚ the cumulative fall in house prices is 20.1%. "Residential stock constraints and weak building numbers in recent months have made us ponder the possibility that price growth in 2014 could be considerably higher‚" Mr Loos said.

"However‚ weak economic growth numbers in the third quarter‚ ongoing poor consumer confidence levels‚ and some residential property-related statistics suggesting a growth peak forming‚ have since made us decide against expecting too much‚" he said.

FNB expects average house price growth of 6.5% for 2014‚ a similar growth rate to what it sees has forecast for 2013.