South African homes keep losing value – and will keep getting cheaper in real terms for at least a couple of months

James de Villiers , Business Insider SA Jun 05, 2019, 03:59 PM

For more, go to Business Insider South Africa

For a second year

residential property prices in South Africa have dropped when corrected for inflation. And the situation is only set to improve once oversupply in the market has been reduced. The FNB Property Barometer for June, released on Wednesday, showed that property prices increased by only 3.3% year-on-year in May, while South Africa’s latest consumer price index (CPI) inflation stood at 4.5%

This means property prices declined by 1.2% in real terms.

Also read:This is the share of South Africans who now own property

“We read [this] as a continuation of a downward adjustment [of property value growth] in line with subdued economic activity and lower disposable income levels,” FNB’s Siphamandla Mkhwanazi said.

While political uncertainty

before the elections has slightly lifted, which will improve sentiment, it will likely take longer before that filters through to economic activity such as property purchases, he said. “For the residential property market, excess supply in the higher-end segments [also] must clear before we see an overall house price acceleration.”

Also read: These are the South African cities where salaries are high and rents are low – relatively

While average real residential property prices are in decline, the barometer showed that:

PROPERTY FOR SALE / SMALLHOLDINGS FOR SALE

SMALLHOLDINGS FOR SALE ON PROP24
SMALLHOLDINGS AND HOUSES FOR SALE ON PRIVATE PROPERTY

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