Confirmation

According to Elna Moolman and Gina Schoeman at Standard Bank, the housing market continues to slow, even though the strong downward trend is, from time to time, masked somewhat by volatility in the monthly data.

House price growth has, despite an uptick in October and November to 8% year-on-year, clearly decelerated from the double digits registered in the first half of the year, and the rates of around 20% clocked up last year.

Residential property prices are virtually stagnating, with the median price stuck at R530 000 from July to September this year, with a slight increase in October to R540 000 where it stayed at in November.

Thus, despite still registering reasonable year-on-year growth rates (that are substantially lower than before), recent movements in house prices have been in line with our expectation of very little, if any, growth going into next year.

This corroborates the slowdown in consumer activity reflected in other indicators such as retail and car sales, even though strong income growth and continued employment creation are supporting a remarkably resilient consumer force.

The slowdown, like the boom preceding it, is not being experienced in the same way across different market segments. Generally, the price growth of luxury houses is slowing down faster, while the more affordable housing segment is still quite robust.