After three years of slowing annual average house price growth, FNB forecasts that 2018 could see a slightly stronger growth rate, but also cautions against expecting too much.
“From an average house price growth rate of 3.7% last year, we project the 2018 average to shift a little higher to nearer to 5%,” said John Loos, household and property sector strategist at FNB.
“This is not a major improvement, but it stems from expectations of marginal economic growth improvement in 2018, from an estimated 0.7% last year to 1.2%, and one lone interest rate hike only late in 2018.”
Loos said that much will depend on the political and government policy environment, with 2018 being the run-up to the 2019 general election.
“Uncertainty around policy direction makes forecasting even tougher than it would be under conditions of greater certainty, posing significant risks to forecasts. Widely publicised ratings agency downgrades for the country, should they occur, can quite easily dampen national sentiment, and this can easily feed into a housing market either directly, or indirectly via the economic impact."
The average price of homes transacted in December was R1,126,224. Read the full article from BusinessTech here.