A soft landing for the residential property market is expected after strong double-digit growth between 2003 and 2006, Standard Bank said on Tuesday.
The bank’s median house-price index moderated to 6,5% year-on-year in November following a relatively strong growth of 10,2% recorded in October.
The five-month moving average growth rate slowed to a rate below 10% for the first time since May this year. It was recorded at 7,7% year-on-year in November.
The median house price for the month of November declined to R575 000, down from R595 000 in October, the bank said.
”The moderation in national house-price appreciation is in line with expectations,” it said in a statement. ”We anticipate that the residential property market will record pedestrian growth in the 5% to 10% range in the short term, with a bias towards the lower segment of the range.”
Standard Bank said it does not expect the house-price index to record negative year-on-year growth rates, which would signal the beginning of a recession in residential property.
Despite the negative effects of higher interest rates on housing affordability, the underlying macroeconomic environment remains supportive of residential property, the bank said. — Sapa