The SA Daily
11 December 2018
HPI rebounds in November
- The Standard Bank house price index (HPI) increased by 4.3% y/y in November, from an upwardly revised 3.5% y/y in October (previously 3.1% y/y). However, in the year-to-date (YTD), the total market is still down with an average annual growth of 4.3% (4.8% in 2017). This implies a virtually flat HPI when factoring in inflation, i.e. still no real appreciation in house prices YTD.
- While purchasing activity has not materially improved from last year’s levels, supply-side trends, however, call for some optimism on building activity. According to buildings statistics data the number of new building units in the planning phase has, year-to-September, clearly improved while housing units reported as completed are also showing signs of recovery.
- Looking ahead, households remain under pressure and Q3:18 GDP data also showed signs that wage growth has been subdued. We believe that there may be a minimal impact on mortgage repayments from last month’s interest rate hike and expect the buyers’ market to persist this year. Household income should see some relief next year, and in the absence of 2019 tax hikes, demand should somewhat pick up but much will depend on whether uncertainty will lift after the 2019 national elections (see our report Nov HPI posts a pleasant surprise of 05 December, by Siphamandla Mkhwanazi).
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