South Africa’s First National Bank (FNB) house price index shows that prices have fallen to levels not seen since December, 2006. Prices saw double-digit deflation in April, dropping 10.2 percent, which brought overall housing to the 2006 level.
The national bank has cut interest rates several times this year, but the house price index has fallen for five months in a row. In March, it fell by 7.9 percent. April prices were an average of R674,885.
FNB property strategist John Loos said that “The steady deterioration was the result of a sizable oversupply that has built up in the residential market, with selling due to financial pressure being a key driver of supply.” The oversupply of housing has led to a forecast that shows a fall in home prices for all of 2009. The current estimate has the average price for a home in 2009 down by 9.5 percent from 2008.
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