House price growth slowed down in May 2013, based on nominal year-on-year growth in the average value of homes in the middle segment of the South African residential property market. This is the result of base effects and a downward trend in monthly price growth since mid-2012, which was expected to eventually cause year-on-year price growth to moderate. May this year saw middle-segment nominal house price growth tapering off to 11,1% year-on-year (y/y) from a revised growth rate of 11,7% y/y in April.
On the back of the latest trends in house price growth and various factors impacting the housing market, single-digit nominal year-on-year price growth is forecast for the full year. Real house price growth will continue to be driven by a combination of movements in nominal prices and consumer price inflation.
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