Affordable housing market holds up best
According to the FNB Property Barometer, the housing market slowdown has become more broad-based: on a quarter-on-quarter basis, all four of the major area value band segments have posted slowing house price growth recently.
The affordable end of the market has held up slightly better, however. On a year-on-year basis, FNB’s Major Metro Low Income Area House Price Index has even seen a growth acceleration of late. These indices provide a picture of the relative performances across areas, grouped by average price levels, in South Africa’s six major metros.
On a year-on-year basis, the Low Income Area House Price Index has shown the strongest growth, recording 6% year-on-year for Q3 2016 compared with the previous quarter’s 5.8%.
The most steady growth area value band in recent years, however, has been the Lower Middle Income Area House Price Index, recording the second highest average price increase of 4.2% in Q3 2016, slightly lower than the 4.6% rate from the previous quarter.
On a quarter-on-quarter basis, all four segments have shown a loss of price growth momentum.
On the Low Income Area Index, quarter-on-quarter growth slowed from 1.7% in Q1 2016 to 1.2% by Q3. At slower rates and bunched together at similar growth, are the Lower Middle Income and Middle Income Areas with 0.7% growth, and the Upper Income Areas with 0.8% – all having slowed from the previous quarter’s growth rates.