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Standard Bank Group
The SA Daily 07 August 2018

HPI growth slows again

  • The Standard Bank house price index (HPI) has started H2:18 by retreating to 3.7% y/y in July, from 4.4% y/y in June, dragging YTD average annual growth to 4.7%. This is flat from the annual average growth in 2017.
  • This lacklustre growth reflects cautious mortgage advances which averaged just 3.3% y/y in H1:18 (versus 3% y/y in H1:17) despite marginally lower borrowing costs in H1:18. It’s also consistent with the soft SA labour market.
  • urther, while consumer sentiment is still quite upbeat, the sub-indices of household expenditure show that households remain unwilling to buy durable goods. And, they will no doubt wait before committing to big buys such as property.
  • We nevertheless still see 2018 house prices marginally stronger than in 2017. However, much will depend on how much sentiment translates into investment and, ultimately, higher employment levels (see July HPI slowed again of 06 August by Siphamandla Mkhwanazi).

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