Nominal year-on-year growth in the average value of middle-segment homes in the South African residential property market remained steady around the 6% level in the first two months of 2016. Somewhat slower price growth occurred in two of the middle-segment categories of housing in February, with an uptick in growth in the third category. In real terms, i.e. after adjustment for the effect of inflation, some price deflation was recorded in January.
The residential property market will continue to be driven by macroeconomic trends and developments with regard to household finances. As a result, nominal house price growth is projected to slow down from around 6% last year to a level of about 5% this year, with the risk for price growth remaining to the downside. Taking into account the forecasts for nominal house price growth and the headline consumer price inflation rate, some real price deflation is projected for 2016.
Read more here: Absa House Price Indices Feb 2016