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Property prices stagnate in South Africa

13 September 2015

The FNB House Price Index continues its broad slowing growth trend as economic stagnation bites.

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The slowing is hardly surprising, coming on the back of ongoing economic stagnation with a rising risk of recession, and gradually rising interest rates.

The FNB House Price Index for August 2015 rose by 4.9% year-on-year.

This is down from the revised 5.2% for July, continuing the broader slowing price inflation trend that started back early in 2014 where house price growth had hit a multi-year high of 8.6% at the end of 2013.

In real terms, when adjusting for CPI (Consumer Price Index) inflation, the rate of house price growth had slowed to 0.3% year-on-year in July (August CPI data not yet available), with rising CPI inflation of 5% only marginally lower than July house price inflation.

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It is likely that the real house price rate of change in August will come in at zero or even negative, given slowing
house price inflation and rising CPI inflation.

The average price of homes transacted in August was R 1,002,665.

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