| Dear Business Partner Please find attached the latest FNB Residential Property Barometer. Highlights: A stagnant house price index despite renewed buying activity The latest FNB House Price Index (HPI) indicates a continued period of price stagnation, with just 0.3% y/y growth in October, down from 0.5% in September. This comes despite signs of a recovery in buying activity. A historical comparison of real house prices to our market strength indices suggests that current real house prices should be higher. This divergence may indicate that while buyer interest has increased—due to improved sentiment and expectations of further rate cuts—market forces have not been sufficient to generate significant upward momentum in property values. As we emerge from the cost-of-living crisis, current trends suggest that buyers remain cautious, prioritising affordability. Nevertheless, we maintain a cautiously optimistic outlook, supported by easing inflation, declining borrowing costs, improving real incomes, and strengthening consumer sentiment. In the report, we also summarise the 3Q24 Estate Agents Survey: Overall, the latest Estate Agents Survey reveals a cautiously optimistic housing market in 3Q24, following a period of election-related anxiety and persistent affordability challenges. Market activity ratings edged higher to an average of 5.8, up from 5.6 in the previous quarter, though still marginally below the long-term average of 5.9. This improvement, coupled with a continued recovery from recent lows, suggests that the market has bottomed out, particularly since the latter half of 2023. Notably, the uptick in activity was driven by stronger market sentiment in middle-to-high-priced segments. Gauteng and the Western Cape experienced increased activity, while the Eastern Cape and KwaZulu-Natal saw a moderation. The rise in market activity has led to shorter selling times, with properties now staying on the market for an average of 11 weeks and two days, down from 12 weeks and two days in Q2. This reduction was observed across all regions, particularly in the higher-priced segments. While the affordable market has not yet shown the same momentum, we anticipate improvements as interest rates continue to decline. Full report attached. Regards, Economist FNB Economics, Wealth and Investments |
