The latest FNB Property Barometer shows price growth in the sector slowed in June but the market remains resilient – for now.
FNB said on Wednesday that its House Price Index (HPI) showed that the annual growth in South African house prices decelerated in June to 3.7% from 4.2% in May. But the market remains surprisingly resilient in the face of the frail economic recovery amid the on-going Covid-19 pandemic.
“Our proprietary market strength indicators show that demand is now moderating, following a strong rebound in 2020 and into 2021. However, these remain above pre-pandemic levels, in part reflecting the positive effect of lower interest rates on market activity,” FNB said.
That makes the housing market, along with mining, one of the few sectors that has rebounded above pre-pandemic levels. If the rest of the economy mirrored these trends, South Africa would be ploughing full steam ahead. But the property market clearly does not reflect broader economic trends, except in a distorting, funhouse mirror kind of way.
So in part, the housing market shows that households with the means have been able to take advantage of the 300 basis points in cuts that the central bank wielded on interest rates…
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Author : Daily Maverick
Publish date : 2021-07-08 12:56:35