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South Africa's house price appreciation remains below inflation


There has been little to celebrate for the South Africa's homeowners for a decade. From 2008 to 2018, real house prices in South Africa -i.e., after inflation - dropped by about 4.8%.

During the year to Q1 2019, while South Africa's nominal house prices rose by 3.96% according to ABSA, when adjusted for inflation house prices again declined - by 0.51%.  This reflects pressure on household incomes and a depressed macroeconomic environment, according to First National Bank's analyst Siphamandla Mkhwanazi.

“We expect house prices to remain confined within the 3.5% to 4.5% range for an extended period,” said Mkhwanazi - well below the central bank's annual inflation forecast of 4.7% this year, and 5.4% in 2020.


Foreigners can own immovable property in South Africa without restriction. However, all foreign funds remitted to the country must be declared and documented. The property must also be endorsed 'non-resident', as a condition for repatriation of funds.


 

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