John Loos, a household and property sector strategist at FNB, said despite a mild acceleration in house price growth in recent months, the theme remained that of a stagnant market with low single-digit growth, translating into ongoing gradual real price decline.
Loos said year-to-date average house price growth was 3.7 percent.
The FNB house price index strengthened year-on-year to 4.4 percent last month from a revised 4.1 percent in August, but with Consumer Price Index inflation at 4.9 percent in August, this translated into a -0.8 percent year-on-year real price decline.
Loos said the recent house price data reflected the weak economy, which had caused a gradual residential market shift away from demand-supply equilibrium. This was evident in the gradual lengthening of the average time that homes remained on the market before being sold.
He added that the slow price growth in the overall housing market, which was dominated by the existing home market, continued to make it challenging for competitively priced stock to be brought to the market by the new residential development sector.
The average value of plans passed for residential units has increased by 112 percent since the end of the residential building boom in 2007.
Loos said the FNB house price index, which was overwhelmingly dominated by the existing home market, had, by comparison, increased by only 53.5percent since 2007.