House price falls gather momentum – real prices fall fastest since July 2008

South African house prices have now had SEVEN months of consecutive falls (both in nominal and REAL terms). Real house prices are falling faster than nominal prices as CPI continues to remain above 6%.

In March 2012 real house prices fell a further 2.23% from where they were in Feb 2012.

Now have a look at the pattern of the Rodrigues curve for South African house prices over the last 12 months here:

The South Africa curve appears to have passed the “return to normal” phase of the Rodrigues curve and has resumed a downward trajectory once more..

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8 Responses to House price falls gather momentum – real prices fall fastest since July 2008

  1. James says:

    ABSA property price decline accelerates

    Price deflation in residential property continued last month, with nominal house prices in the middle segment down 4.9 percent year on year in April, Absa analyst Jacques du Toit said on Tuesday.

    After adjustment for inflation, prices fell 8.6 percent in March.

    The latest Absa house price index showed that year on year, the nominal price of small homes slid 17.8 percent last month to R622 100 on average, while they have fallen 15.9 percent in the year to date.

    The price of medium-sized homes lost 1 percent year on year to R964 000 last month and large home prices fell by 0.5 percent to R1 469 700.

  2. Hangman says:

    down down down down

  3. chris says:

    this may be a dof question – but am I understanding this right in how real house prices drop faster than nominal house prices – If CPI is 6%, and nominal increase is 2%, then in real terms thats -4% – is that right??

  4. Hangman says:

    Lies lies lies :) go and read ABSA`s numbers…

  5. Joe says:

    Could House Price please update the House Real /Nominal Growth Chart.

  6. Hi Joe, thanks for the comment. With house prices growing at 8.4% and inflation at 6% for the year, house prices are growing ahead of inflation. We have now updated the annual real house price chart here, which shows grow for 2013 YTD in real terms. However the important thing to keep in mind is this is real terms in ZAR. It does not reflect the fact that the buying power of ZAR has decreased in global terms.

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