Sign in
Research link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services link-chevron Created with Sketch.
link-chevron Created with Sketch. Products and Services
Economics link-chevron Created with Sketch.
Equities link-chevron Created with Sketch.
Analysts
Analysts
Help and Support
Help and Support
The SA Daily 07 August 2019

House prices remain muted

  • The Standard Bank median House Price Index (HPI) was up a tad to 3.9% y/y in July, from 3.8% y/y in June. However, adjusted for inflation house prices declined 0.5% y/y in July (using July’s inflation forecast); prices had slipped 0.7% y/y in June.
  • Year-to-date nominal house prices are up just 4.1% y/y (5.6% y/y same time last year). The national median house price was R1,017,041 in July (R1,009,641 in June), with Western Cape house prices 37.4% above the national median and Gauteng 3.8% below, and KwaZulu-Natal 4.8% above the national median.
  • Real house prices are therefore still trending sideways, with no growth foreseen soon. In its current state, the SA economy cannot support real growth in house prices — even after the recent 25 bps rate cut. Both policy and political uncertainty continue to undermine confidence, with households delaying large purchases and/or long-term debt obligations.
  • Also, unemployment is still rising, with prospects for employment and economic growth still bleak. The unemployment rate rose to 29.0% in 2Q19, with employment for those aged 25 to 34 falling by 72 000 y/y and for those aged 35 to 44 falling 59 000 y/y. Arguably, these are people who should at least be purchasing their first homes or already be paying off mortgages. We therefore do not foresee real house price growth for at least the next 18 months until such time that political and policy reforms have been entrenched.

Read PDF