The FNB House Price Index remained steady last month, at 3.6% year-on-year, but is still lagging behind the 3.9% annual growth for this year.
This stabilising of house price growth follows a generally slowing trend in the first half of the year, says FNB economist Siphamandla Mkhwanazi.
“Positively, demand has shown mild signs of improvement, while sellers are opting to hold on to their properties amid unfavourable selling conditions.”
Improvements in demand can be attributed to some easing in buyer despondency post elections, the increased bargain hunting given the attractive pricing, more competition between lenders as well as lower interest rates. Increased lending, however, has been more skewed towards the higherpriced segments.
“Activity in the lower end is being hindered by lack of affordability, primarily because of the scarcity of adequately priced properties in prime locations,” Mkhwanazi says.
While there are major variations across regions, price groupings continue to show robust growth in the lower end, he adds.