Year-on-year growth in the average nominal value of middle-segment homes in the South African housing market remained on a declining trend in September 2016, with growth at its lowest level since September 2012. On a monthly basis, prices deflated in nominal terms in the past four months after some data revisions.
In real terms, i.e. after adjustment for the effect of consumer price inflation, house prices continued to deflate on both a year-on-year and month-on-month basis in the first eight months of the year. These house price trends came against the background of economic developments affecting household finances and consumer confidence, which eventually impact the performance of the property market.
Against the background of trends in and prospects for the economy, household finances and levels of confidence, nominal house price growth is forecast to remain in a narrow range of between 4% and 4,5% in 2016 and 2017, with real price deflation of around 1,5% to 2% expected over this period, taking into account the outlook for headline consumer price inflation, which is forecast at 6,4% in 2016 and 5,5% in 2017.
Read more here: ABSA House Price Indices September 2016