South Africa’s housing market continue to shrink as price index for medium-sized apartments fell by 0.32% during the year to Q2 2016, its fourth quarter of annual price declines, the latest figures show.
Global Property Guide’s detailed analysis of South Africa’s housing market, based on the latest house price figures available, show that house prices are expected to continue falling during the remainder of 2016, amidst the continued weakness of the rand, falling foreign investor confidence, and uncertain economic conditions.
South Africa’s economy shrank 1.2% in Q1 2016, following an increase of 0.4% in the last quarter of 2015. Last year, the economy grew by about 1.3%, its slowest growth since the country emerged from recession in 2009. The economy is expected to slow further, with real GDP growth estimated at 0.6% this year, amidst severe drought, rising inflation, and declining exports, according to the IMF.
The South African Reserve Bank (SARB), the country’s central bank, held its benchmark repurchase rate at 7% in July 2016, after raising it by a cumulative 75 basis points in the first four months of this year, in an effort to stop the rand from depreciating further and to contain inflationary pressures. In January 2016, the rand was 29.3% down on a year earlier, but in recent months the rand has partially reversed its losses, rallying to 10-month high against the US dollar, with a monthly average exchange rate of ZAR13.78 = USD1 in August 2016.
For the latest detailed housing market analysis of individual regions and countries, check out the Global Property Guide’s global survey for Q2 2016.