However, the housing market remained weak, said FNB household and property sector strategist John Loos.
FNB’s house price index released this week revealed that house prices increased by 3.6percent year-on-year last month from 3.3percent in May.
Loos said there had been a mild acceleration in the rate of increase in house prices since the revised low of 1.7percent year-on-year in December.
After adjustment to take into account the impact of inflation, real house prices declined by 2percent in May this year compared to the revised 2.1percent reduction in April.
Loos added that house price growth on a month-on-month basis slowed again last month for the third consecutive month.
He said this pointed increasingly to a renewed “soft patch” emerging, not only in the housing market but also in the economy, after there were signs in the first quarter of this year that a slightly stronger economy may be approaching.
FNB said the average price of homes transacted last month was R1102190.
Standard Bank, which claims to be the biggest home loan provider in the country, last week launched a monthly provincial house price index and quarterly regional house price index.
The bank said these indices, which measured the change in median prices of properties sold, would provide key insights into regional and provincial market trends across the country.
It said the advantage of a median was that it is not unduly influenced by extreme values and outliers.
Siphamandla Mkhwanazi, a Standard Bank consumer economist, said their research for May this year showed that a price recovery in Gauteng in the first few months of the year was driven by a robust performance in Tshwane, where first-time buyer demand was particularly strong.
The provincial house price index also revealed that the Western Cape was currently attracting “affluent” buyers, because of the higher proportion of cash transactions, but the growth momentum had diminished in recent months as middle income buyers were being priced out of the market.
Mkhwanazi said they estimated that cash transactions in the Western Cape had surpassed mortgage-backed transactions, with 55.8percent of transactions in the province cash deals.
He said house price growth in KwaZulu-Natal had struggled to outpace inflation for some time now while growth was still subdued in the Eastern Cape although it was showing signs of recovery.
The regional house price index showed that median prices in Johannesburg in the first quarter of this year rose by 6percent year-on-year and in Cape Town by 13.9percent, with Tshwane house prices growing faster than Gauteng at 8.8percent.
Standard Bank said the month-on-month median price of a house transacted in Gauteng was 0.1 percent lower in May than in April. Mkhwanazi said this signalled that the recovery in house prices in the first quarter may be losing steam as consumers were under increasing financial pressure.