Year-on-year growth in the average nominal value of middle-segment homes in the South African housing market slowed down further in July 2016 to its lowest level since October 2012. On a month-on-month basis, nominal price growth continued on its downward trend, which is evident since the end of last year. Some real house price deflation, i.e. after adjustment for the effect of consumer price inflation, was recorded on a year-on-year and month-on-month basis during the first six months of the year.
Based on prospects for the economy, household sector finances and levels of confidence, nominal house price growth is forecast at between 4% and 4,5% for 2016 and 2017, with the risk of price growth remaining on the downside over this period. Real price deflation of between 1% and 2% is expected for this year and next year on the back of the outlook for nominal house price growth and the headline consumer price inflation rate.
Read more here: Absa House Price Indices July 2016