Boldenone Research,Bolt 200m,Equipoise Bloat
House price growth feels inflation effect
This is virtually unchanged from February upwardly revised growth rate of 8.6%, reflecting a residential market that remains solid, said John Loos, FNB's household and property sector Equipoise Bloat strategist.
Real house price growth that is when house prices are adjusted for consumer Bolt 200m price inflation (CPI) came in at 2.48% year on year in February. March CPI not yet available.
This represents a slight slowing from revised 2.6% real price growth in January, due to the pace of CPI inflation having quickened a little in February, from 5.8% in January to 5.9%.
The average price of homes transacted was R951 490.
In real terms, the index remained well above levels of a decade ago, up 26.1% from February 2004.
However, compared with last decade real average price peak, reached in December 2007, the February 2013 real price was still 17.3% lower.
This implies that the index has nearly reached a level where the valuers aggregated demand rating draws equal in strength with the valuers aggregated supply rating.
The Market Strength Index pointed to further improvement in the market demand supply balance in March 2014, to reach a level of 49.52.
Rising demand rating
The increase in this index continued to be fuelled by the combination of growth "Comprar Gh Jintropin" in demand along with mounting supply constraints, as reflected in a rising demand rating and declining supply rating.
While the pace of improvement in the Market Strength Index remains strong, recent months month on month growth (seasonally adjusted) in this index have slowed slightly.
"This could reflect the start of some reaction to the further weakening in household disposable income growth in the final quarter of 2013, and more recently an interest rate hike at the end of January," said Loos.
"However, the pace of improvement in this index remains solid, and the Market Strength Index is now very near to 50, where the Boldenone Research demand and supply ratings would be 'balanced'. This is arguably reflected in house price growth, which is mildly positive in real terms."In March, the release of the SA Reserve Bank (Sarb) Leading Business Cycle Indicator for January showed further year on year decline to the tune of 2%.
Employment growth continues at a snails pace, which has slowed wage bill growth "Anabola Steroider Norge Lagligt" markedly since 2010/11.
Nominal disposable income growth in the fourth quarter of 2013 slowed further to 6.46% year on year, now lower than house price growth.
"Then there is the interest rate hiking cycle that this highly credit driven market may have to deal with," said Loos.
"January saw the 1st 50 basis point rate hike by the Sarb and its Monetary Policy Committee has intimated that, although it didn hike last week, there probably more to come, with the policy repo rate still on the low side, and negative in real terms."With these factors in mind, along with FNB's expectation that interest rates may rise a little further to where the prime rate ends 2014 at near 10%, Loos believes the pace of market strengthening will slow later in the year, resulting in mild slowing in average house price inflation.
"The extent Comprar Gh Jintropin of the price growth tapering expected would be back down to a rate of 5% to 6% by year end, slightly below CPI inflation, which is expected to end the year just above 6%," said Loos.
"Finally, the combination of 8.6% house price growth and a slightly higher 9% prime rate should continue to keep the market by and large healthy in terms of "Comprar Gh Jintropin" containing levels of speculative activity."
FNB's alternative measure of real prime rate, using house prices with which to adjust prime rate instead "Oxandrolone Powder India" of using CPI, remains slightly in positive territory to the tune of 0.4% in March.
"While only slightly positive, this situation remains highly favourable compared with the 2004/5 period where a strongly negative real rate promoted speculative behavior on a large scale.