House Price South Africa readers have had their say. Thank you to all who voted in the HPSA poll. Here are the results:
“Are house prices going to crash in South Africa?”
Highly likely: 31.58%
Not likely: 52.63%
Just over half of respondents said “Not likely”. Strikingly almost 32% of respondents voted “Highly likely”, while the remainder decided to sit on the fence with “Depends”.
This question was probably a little ambiguous because in nominal terms, it is indeed highly unlikely that house prices will crash. In fact if you have a look at the nominal house price chart here http://housepricesouthafrica.com/, you will see that nominal house prices have not “crashed” in South Africa since ABSA records began in 1966.
However, in real terms, a housing price crash is very much on the cards. It already happened between August 2007 and May 2009 where real house prices dropped a dizzying 16% in less than two years.
The question though is will prices drop further? At the moment they seem to be on a plateau, but could this be a false plateau with prices set to break through and drop further as the market comes under further stress?
Almost 32% of you believe they will.
Time will tell.