Property
Slowdown in average house price growth expected

The forecast is for average house price growth to slow from a 6% average in 2015 to a 4.8% average in 2016, and a still slower 3.8% in 2017, John Loos, household and property sector strategist at FNB Home Loans, said on Monday.

While still positive in nominal terms, these projected rates would be below CPI inflation, translating into negative growth in real terms.

Such negative real house price growth would reflect both higher interest rates along with ongoing weakness in economic growth, employment and household income growth, he explained.

The rental market could begin to mildly outpace the slowing home buying market through the forecast period, in turn leading to rising yields on residential property, in his view.

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