Standard Bank house price index shows little change in July 2013

Posted On Wednesday, 07 August 2013 06:35 Published by Commercial Property News
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The Standard Bank house price index improved by 8% year on year in July‚ from 7.8% year on year in June‚ Standard Bank said in a note on Monday.

The Standard Bank House Price Index

The nominal index growth for freehold properties recorded a 10.1% year-on-year improvement in July‚ from 9.8% year on year in June.

The nominal index monitoring sectional title units registered a comparatively modest improvement of 4.2% year on year in July‚ from 3.4% year on year in June. Once again‚ improvements in the index continue to be largely range-bound between 7% and 8%‚ the bank said.

Household mortgage credit growth continues to bide its time between 2% and 3% year on year‚ with the most recent print seeing household mortgage balances grow by 2.7% year on year in June.

The continuation of the prevailing accommodative monetary policy environment remained a key support to incremental credit uptake‚ the bank said.

However‚ the extent of household indebtedness as well as poor creditworthiness would conspire to dilute the full benefits offered by a low interest rate environment.

On the building front‚ the value of real completed residential building improved by 11.2% year on year in the first five months of this year‚ compared to the corresponding period last year.

New flats and townhouses saw the most notable growth last year‚ recording 19.3% year-on-year growth in the number of completed units‚ and it appeared as though this strong growth momentum was being carried through into 2013 as well‚ Standard Bank said.

“The prospects for key macroeconomic supports provide a mixed outlook for the house price index‚ which we expect will maintain its course in single-digit improvements this year. We expect the repo rate — and by extension the prime rate — to remain unchanged in 2013. While the most recent CPI (consumer price index) print provided a much-needed reprieve from a purchasing power perspective‚ we would not ascribe this as an overriding trend‚” the bank said.

“We still see the CPI breaching the upper limits of the target band in the third quarter. Further‚ the most recent data pertaining to employment as well as consumer confidence are unlikely to provide a catalyst for a sustained double-digit rise in the house price index‚” it said.

Last modified on Thursday, 13 March 2014 08:38
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