The gradual downward trend in local annual house price growth since late 2014 continued up to November 2015. Year-on-year growth in the average nominal value of homes in the middle segment of the South African housing market slowed down further to 4,2% in November from 4,6% in October. In real terms house price growth remained under downward pressure up to October on the back of declining nominal price growth and inflation trends.
Factors related to the economy, household finances and consumer confidence will remain important to the future performance of the residential property market. Nominal house price growth of 5%-6% is forecast for 2016, with the risk to the downside against the background of economic and consumer sector trends and prospects. Based on the outlook for nominal price growth and the headline consumer price inflation rate, real house price growth is expected to remain under severe pressure in the next 12-18 months.