Dear Valued Customer
For your information, attached the Absa Housing Review for the 2nd quarter 2015, presenting trends in and prospects for the global and South African economy, as well as for the local household sector and residential property market. Property price trends in the report are presented on the level of various segments and geographical regions up to the 1st quarter of the year.
After performing relatively well in 2014, nominal and real year-on-year growth in the average value of homes in the middle segment of the market slowed down in the first quarter of 2015, with price growth in the luxury segment also tapering off over the same period. The slowdown in nominal price growth in middle-segment housing was already evident in the fourth quarter of last year. However, year-on-year price growth in the affordable housing segment accelerated somewhat in the first quarter of the year from the final quarter of last year. The recent trends in house price growth came against the background of economic developments and trends in household finances and consumer confidence.
House price growth is forecast to remain in single digits in 2015 and 2016, with price growth expected to be lower this year against the background of the outlook for economic growth, inflation and interest rates, which will affect consumers and the property market. Base effects will also contribute to lower price growth in 2015 compared with the previous two years when nominal price growth of between 9% and 10% was recorded. Based on the current forecasts for nominal house price growth and consumer price inflation, only marginal real house price inflation is projected for this year and next year.
Kind Regards The BondExcel Team