The FNB House Price Index fell slightly to an average 3.7 percent in February, below the 4 percent in January and the 3.9 percent average of last year.
The 3.7percent level is also below FNB’s forecast CPI Inflation rate of 4.2 percent in February, FNB economist Siphamandla Mkhwanazi said yesterday.
The trend of house prices remaining mildly below CPI inflation, or losing value in real terms, has continued since early 2016, said FNB property sector strategist John Loos.
Macroeconomic fundamentals point to a “muted” property market in the near term, with house price growth expected to range between 3.5 to 4.5 percent, against FNB’s average annual inflation forecast of 4.7percent in 2019, said Mkhwanazi.
A further weakening of the FNB Valuers’ Market Strength Index (MSI) in February indicated a deteriorating demand-supply balance, he said.