South African house prices grew by their slowest pace in almost four years in the year to September, weighed down by higher interest rates and rising inflation, lender Standard Bank said on Monday.
Housing prices in Africa’s biggest economy have tapered off over the past year, possibly signalling the end to an extended property boom that has pushed prices up more than 200% since 2000.
A Standard Bank survey showed house prices grew by a median of only 2,9% in September compared to 6% in August. The five-month moving average growth rate decelerated to 6,7% year-on-year in September from 8,7%.
”House prices data continue to reflect softening consumer activity,” Standard Bank said in a statement.
”The onslaught on consumers’ finances from all round, record-high petrol prices, soaring food prices and rising interest rates, is taking its toll.”
South Africa’s central bank has hiked its repo rate by a full percentage point to 8% since June to curb rising inflation, driven largely by rising fuel and food costs and a weaker exchange rate.
Most analysts expect another hike in rates when the central bank’s monetary policy committee meets next week and a further increase in December.
A consumer spending spree, fuelled by the lowest interest rates in more than two decades, has pushed household debt to record levels, raising debt service costs as the rate cycle turned.
Standard Bank said the moderation in the housing market was expected to continue on the back of deteriorating household finances and a decline in investors’ yields. – Reuters