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The SA Daily 15 October 2018

HPI slower again in Sep

  • The Standard Bank house price index (HPI) ended Q3:18 by moderating further in September, to 2.8% y/y, from 3.4% in August, dragging down year-to-date (YTD) average annual growth to 4.5%, from 4.8% in 2017. This implies a virtually flat HPI when factoring in inflation, implying no real appreciation in house prices YTD. Depressed house price growth reflects the soft labour market and cautious advancing of mortgages, amid tax hikes and record fuel prices.
  • From a demand perspective, purchasing activity is sideways despite upbeat consumer sentiment. In particular, properties at the higher end of our price segmentation have seen considerably lower demand. This suggests that although consumers are optimistic about the SA economic outlook, they are still relatively unwilling to commit to substantial financial obligations. Consumer reticence is also evident in passenger car sales slowing in recent months.
  • Overall, we regard the current property market conditions as biased towards buyers and against sellers. We expect the current buyers’ market to persist this year. Much will depend on labour market outcomes, which we expect to improve only in 2019 (see HPI slows further in September of 10 October by Siphamandla Mkhwanazi). 

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