FNB House Price Index growth starts to accelerate

After a recent slowing growth rate, April year-on-year average house price growth starts to accelerate once more, beginning to reflect 1st quarter demand improvements. 


After a period of slowing year-on-year house price growth late in 2012 and early-2013, April data started to show renewed acceleration.

After some months of slowing year-on-year growth, in line with something of a lull in the economy during the 2nd half of last year, the FNB House Price Index for April 2013 showed renewed growth acceleration. The April year-on-year house price growth rate came in at 5.2%, up from a revised 4.6% for March.

A period of low, strike-affected, economic growth late in 2012 may have caused some slowing in house price growth through the summer months. But some normalization of growth, and apparent strengthening in residential demand in the 1st quarter of this year, is perhaps beginning to be reflected in this renewed rise in year-on-year house price growth.

The average value of homes transacted in the FNB House Price Index was R878,687

In real terms (adjusting house prices for general inflation in the economy using the CPI), as at March there was a year-on-year decline to the tune of -1.2%, with consumer price inflation for March still at a higher 5.85%, compared with house price inflation of 4.6% in that month. Renewed acceleration in nominal house price growth, however, may see this pace of real decline diminishing in the near term.

At a macroeconomic level, FNB believes that renewed acceleration in house price growth is reflective of a “normalizing” economic growth rate after major strike disruptions caused a significant drop in economic growth in the 2nd half of 2012.

At a more micro level,[ more..]

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