As the biggest home loan provider in the country, we’re proud to launch two exciting house price indices that provide key insights into regional and provincial market trends across the country: the Provincial House Price Index (PHPI) and Regional House Price Index (RHPI).
Property is one of the biggest and most daunting investment decisions for consumers and investors, and these latest consumer tools reflect our determination to support our clients on every step of their property journey, assisting them to make sound, well-informed decisions based on our research.
Supplementing the existing monthly National House Price Index (HPI), the PHPI and RHPI provide rich data into the trends underlying residential property movements in the different regions and measure the median prices of properties sold. The former differs slightly in scope from the national HPI in that it relies strictly on actual market prices, while the latter uses the assessment value of properties.
The PHPI measures price developments for residential properties sold in each province and financed by Standard Bank. This entails capturing market prices for residential properties, the price of land being included in the price, with prices also covering the acquisition cost of a property, but not transaction costs.
According to Andrew van der Hoven, Head of Home Loans at Standard Bank, the indices will provide a more comprehensive analysis of residential property in South Africa through regional price differentiation. Siphamandla Mkhwanazi, Standard Bank Consumer Economist, shares that the new index will show a diverse performance in property prices.
Provincial and Regional House Price Index May 2017Current trends according to the PHPI:
Western Cape: Attracting “affluent” buyers. However, growth momentum has come off in recent months, as middle-income buyers are priced out.
KwaZulu-Natal: Subdued performance. Growth has struggled to outpace inflation for some time.
Eastern Cape: Growth is showing signs of recovery, though still subdued.
The regional HPI shows a diverse performance of property prices with the following key trends:
Johannesburg: Showed signs of recovery. Median prices in Johannesburg rose 6% year on year.
Cape Town: Continued to outperform with prices increasing by 13.9%, although steam coming off.
Tshwane: Solid performance – growing at 8.8%. Supported by strong demand from first-time buyers.
eThekwini: Some recovery, but still under pressure. Support coming from up-market areas.
Ekurhuleni: House prices took a knock in 2015/16, and now the trajectory points to a recovery.
Nelson Mandela Bay: Prices are dropping rapidly, although not declining (in nominal terms) yet. The metro is dealing with a water crisis and dysfunctional municipality.
“The national economy is under pressure, but by deepening our insights into what is happening across our provinces and regions, we really begin to understand how we are doing – and where the opportunities lie,” says Mr van der Hoven.
The PHPI Index will be released monthly, while the RHPI will be released on a quarterly basis.