Nominal year-on-year growth in home values in South Africa, based on Absa’s house price data, remained in single digits in the second quarter of 2016, with some real price deflation evident in all segments of housing as a result of low nominal price growth and inflationary pressures. These trends in house price growth came on the back of macroeconomic trends and factors affecting consumers financially and eventually the various segments of housing.
Based on the economic and household sector-related trends and expectations, 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 1,5% and 2,5% is expected for this year and next year on the back of the abovementioned forecasts for nominal house price growth and the headline consumer price inflation rate.
Read more here: Absa Housing Review 2016 Q3