FNB Property Barometer Housing Market Forecast
Category Market News
A return to a higher general inflation environment later this year could see house price growth rising
mildly in 2016, but in “Real Growth” terms the forecast is lower.
Some minor increase in economic growth in 2015 is not expected to provide any meaningful boost for residential demand growth in a slowly rising interest rate environment. While nominal house price growth may be slightly stronger in 2016, compared to 2015, this would be due to higher CPI and wage inflation next year and not necessarily due to market strengthening.
Rather, one should look at our real house price growth forecast, where house prices are adjusted for CPI inflation, to see our forecasts of weakening residential demand growth through 2015 and 2016 being
reflected. Here, we expect a turn from positive average real house price growth for 2015 to negative real price growth in 2016.
Author: John Loos
