House prices grow at a more moderate pace in January

Posted On Monday, 03 February 2014 15:57 Published by eProp Commercial Property News
Rate this item
(0 votes)

House prices grow at a more moderate pace in January, but FNB believes this has nothing to do with January's surprise rate hike.

John Loos

 

 

 

 

House prices grew at a more moderate pace in January‚ as measured by the First National Bank (FNB) house price index‚ but the bank believes this has nothing to do with January’s surprise rate hike. FNB’s monthly house price index rose to 7.9% year on year in January‚ slightly lower than the revised 8.2% registered in December.

In real terms‚ the house price index remained well above levels of a decade ago‚ up 26.8% from January 2004. FNB said they did not attach much significance to January’s moderation in house prices as the market was still gathering broad momentum.

But last week’s 50 basis points rate hike from 5% to 5.5% had changed the bank’s forecast for the housing market from a “mild strengthening” to a “mild slowdown”.

“Our expectations for further mild improvement in 2014 were based on the all-important assumption that interest rates would not rise until early-2015‚ or perhaps at the earliest very late in 2014‚” FNB property analyst John Loos said. 

“In a highly credit-driven market‚ such as the residential property market‚ an interest-rate ‘surprise’ changes a lot‚” Loos said

The bank said while one lone interest rate hike would not make a big difference to instalment repayments‚ it was expected to have a significant effect on buyer sentiment “because many aspirant buyers will know that interest rate hiking in SA‚ once it starts‚ normally doesn’t stop at one lone hike”.

He said: “No longer do we expect a mild strengthening in 2014 but instead a mild slowdown in the market”. 

Last modified on Friday, 14 March 2014 08:57

Most Popular

53 Telkom properties coming up for auction

Mar 02, 2020
Orange Grove
GoIndustry DoveBid SA (GoIndustry) is hosting another massive property auction on behalf…

Balwin's Munyaka registers record R850 million in opening weekend sales, selling 555 apartments

Mar 09, 2020
Steve_Brookes_Balwin_Properties
JSE listed Balwin Properties, a developer that cares about environmentally responsible…

Young buyers driving residential property market in Bloemfontein

Mar 04, 2020
Bloem Willows
Bloemfontein is experiencing a surge in residential property transactions concluded by…

Hyprop bolsters Rosebank Mall offering through securing the Checkers Premium FreshX concept

Mar 04, 2020
Rosebank Mall
Shoppers at Rosebank Mall in Johannesburg can look forward to a world-class supermarket…

Fairvest Property Holdings maintains above-inflation growth in challenging market

Mar 02, 2020
Darren Wilder CEO Fairvest Property Holdings
Fairvest Property Holdings Limited (“Fairvest”) today again announced solid results for…

Please publish modules in offcanvas position.