House prices on the downturn again: FNB

House prices on the downturn again: FNB

After a brief uptick around mid-year.

Johannesburg, Dec 1 (I-Net Bridge) - House price growth is on the downturn once again, after a brief uptick around mid-year according to FNB's House Price Index.

The November average house price was still 3.2% higher than November a year ago (year-on-year), but this represents a slower growth rate than the October revised year-on-year growth rate of 4%, and represents the third consecutive month of slowing year-on-year house price growth.

The average price of homes traded, according to the FNB House Price Index, was R804,242.

In real terms (prices adjusted for general consumer price inflation) the October FNB House Price Index declined by -1.9% year-on-year (November consumer price data not yet available), with consumer price inflation of 6% in that month significantly higher than the 4% nominal year-on-year growth in house prices.

FNB said that the latest data point now meant that, in nominal terms, the average house price in real terms was -16.6% lower than its long term peak reached in February 2008, a significant correction to date.

In nominal terms, the index was a marginal +5% higher than it was in February 2008.

However, compared to July 2000 when the index started, the average price at November 2011 was 209.5% higher in nominal terms, and 63.8% higher in real terms.
On a month-on-month basis, the seasonally-adjusted FNB House Price Index showed the residential market to already have been in a state of nominal price decline (negative growth) for the past 4 months.

In November, the extent of this price decline on October was -0.74%, which was slightly less decline than the revised -0.89% measured in October. Since the seasonally-adjusted price decline started four months ago, the total decline had been -2.3%.

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