FNB | Residential Property Barometer – September 2023

Dear Business Partner

Please find attached the latest FNB Residential Property Barometer. Attached is also a special report, which investigates how the unprecedented load-shedding intensity has reshaped buyer preferences in the domestic market.

FNB Residential Property Barometer: Summary The FNB House Price Index growth slowed to 0.8% y/y in August, down from 1.2% in July (revised from 1.1%). Our internally developed market strength index, derived from our property valuers’ database, continues to show declining levels of demand, while the supply of properties for sale was relatively stable in August. As shown previously, mortgage volumes are now tracking lower than pre-pandemic levels. Feedback from our latest Estate Agents survey suggests that two-thirds (67%) of listed properties now take three months or more to sell, up from 56% in 2Q23.
Nevertheless, 50% of interviewed agents expect activity to pick up in the next three months, especially in the affordable market, largely due to seasonal factors. More positively, recent macroeconomic data shows a level of resilience in domestic economic activity, despite structural constraints, including acute electricity shortages and railway network inefficiencies. Similarly, the labour market continues to surprise to the upside, with formal employment now back at pre-pandemic levels.
Nevertheless, available data suggests that wage growth is unable to keep up with the elevated living costs: compensation of employees increased by 5% y/y in 2Q23, below the 6.2% inflation in the same period. However, surveyed wage expectations signal that wage growth could accelerate slightly above inflation next year, which could provide some relief for consumers.

Full reports attached.

FNB Economics, Wealth and InvestmentsĀ 

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