While housing demand is still high, we are starting to see the rate of house price growth slow down just a little as stock levels improve.
This is happening because new developments that were planned 18 to 24 months ago are now coming on to the market; because the rate of new household formation is slower in response to the current economic uncertainty, and because of an increase lately in the number of distressed sellers
who are choosing to rent
rather than buy another home.
This does not mean that house prices are falling – just that they are not rising as fast as they were a few months ago – and that is good news for prospective buyers
who have worked hard to pay off debts and save deposits so that they can afford a home of their own. Interest rates are still at comparatively low rates and if they buy now they are likely to get more home for their money.
Our current figures by and large co-incide with those released by First National Bank (FNB) following its latest analysis of Deeds Office
figures, which shows that price growth in the Upper Income suburbs slipped from 7,4% a year ago to 5,1% in the second quarter – probably because recent interest rate increases have also caused many owners in the Middle Income suburbs to re-consider upgrading.
At the other end of the scale, price growth in the Township markets fell from 9,2% a year in the first quarter to 8,8% a year in the second quarter.
In between, growth the Middle Income suburbs (which benefit most from both downsizing and upgrading) rose from 7% in the first quarter to 7,4%, but the growth rate in the Lower Middle Income areas also decline fell from 6,7% to 6,4%, while that in the Low Income suburbs stayed static at 7,4%.