October 2016 saw year-on-year growth in the average nominal value of middle-segment homes in the South African housing market remaining relatively low against the background of trends in and prospects for the economy and the household sector. On a month-on-month basis prices showed subdued growth of less than 0,5% in October. In real terms, i.e. after adjustment for the effect of consumer price inflation, house prices deflated further in September this year.
Nominal price growth in the middle-segment of the housing market came to 4,4% year-on-year in October this year, with real price deflation in September recorded at 1,7% year-on-year. The average price of a middle-segment home was in real terms about 12% lower in September this year compared with the peak in August 2007.
In view of economic and household sector-related trends and prospects, nominal house price growth is forecast to average between 3,5% and 5% in 2016 and 2017, with prices set to deflate by 1,5% to 2% in real terms over this period. Real house price trends will be affected by consumer price inflation, which is expected to average 6,3% this year and 5,5% next year.
Read more here: Absa House Price Indices October 2016
