The Recent slowing in house price growth is broad-based across most segments, as monetary and fiscal stimulus run out and domestic economic growth stagnates.
In the 1st quarter 2015 update of FNB’s Area Value Band House Price Indices, slowing house price growth is fairly broad-based, with 3 out of 4 segments showing noticeable slowdowns in price growth in recent quarters.
Using Deeds data transactions by individuals, FNB compiled the 4 FNB House Price Indices by Major Metro Area Value Band, namely Upper Income Areas (Average house price = R2.642m), Middle Income Areas (Average Price=R1.396m), Lower Middle Income Areas (Average Price = R868,887) and Low Income Areas (Average Price = R461,407.
On a quarter-on-quarter basis, 3 out of the 4 Area Value Bands showed a noticeable slowing in house price inflation. These were the Upper Income Area Band, whose inflation slowed from 2.5% in the 3rd quarter of 2014 to 1.7% in the 1st quarter of 2015, the Middle Income Area Band from 2.1% to 1.1% over the same period, and the Low Income Area band from 1.8% to 1.2%. The only value Band to hold its own was the Lower Middle Income Area Band, whose quarter-on-quarter inflation rate of 1.5% in the 1st quarter was unchanged from 2 quarters earlier.