According to ABSA’s latest House Price Index, the nominal year-on-year growth in the average value of homes in the middle segment of the South African housing market slowed down in June 2013 from May. Base effects and subdued month-on-month price growth are having a moderating effect on year-on-year price growth, recorded at 11,8% year-on-year (y/y) in June from a revised growth rate of 12,2% y/y in May this year. The first six months of 2013 saw the average value of middle-segment homes rising by 11,2% y/y.
Taking account of house price trends and the various factors impacting the housing market, single-digit nominal year-on-year price growth is forecast by ABSA for the full year. Real house price growth is expected to continue to be driven by a combination of movements in nominal prices and consumer price inflation.