CAPE TOWN – FNB’S House Price Index was flat at 3.8 percent year on year in March versus 3.7 percent year on year the previous month. 

This took the first quarter nominal house price growth to 3.8 percent year on year, slightly softer compared with the 4.1 percent recorded in the fourth quarter of last year. 

This means house price appreciation still languishes below inflation, reflective of pressure on household incomes amid a depressed macro-economic environment, FNB analyst Siphamandla Mkhwanazi said on Friday. 

“We expect house prices to remain confined within the 3.5 percent to 4.5 percent range for an extended period,” which is below the banks’ annual inflation forecast of 4.7 percent in 2019 and 5.4 percent in 2020, said Mkhwanazi. 

He said the housing market continued to be weighed down by the weak macroeconomic environment. 

Declining real wages; a higher tax burden; the higher fuel and utility prices and the impact of load-shedding on employment would likely dampen already low levels of consumer confidence. 

More positively, however, the SA Reserve Bank’s decision not to hike interest rates and the affirmation of South Africa’s credit rating by Moody’s represented a reprieve, he said.