FNB says its house price index inflation rate has risen to 8% in March with the bank reporting a widespread acceleration in house price growth countrywide.
FNB property strategist, John Loos, said today that their survey of estate agents showed that Gauteng agents were the most upbeat, while the Western Cape was still leading the way with year on year growth of 8.2 percent.
However, Loos says the two regions that are moving in the opposite direction are the Eastern Cape and Kwazulu Natal, and this is despite the fact that both regions have strong manufacturing economies.
He says the two regions are experiencing growth, but are on a slowing growth trend.
"These two strongly manufacturing-driven economies often appear to lag the trend of the two more services driven economies of Gauteng and the Western Cape by a few quarters," Loos said.
"And so, whereas Gauteng and the Western Cape have been on a recently accelerating price growth path, these two major coastal regions have seen their house price growth slowing a little in recent quarters, with the Eastern Cape measuring 5.8% growth in the 1st quarter and KZN 4.5%," he added.
Loos said the country's fived minor provinces as a group (Limpopo, Mpumalanga, North West, Free State and Northern Cape) appear to be following the accelerating price growth path of Gauteng and the Western Cape, reaching 7.6% year-on-year by the 1st quarter.
"These regions are diverse, but one hears reports of strong market performances in towns where mining and power generation expansions are happening, for example Kathu or Lephalale, while agriculture performance has generally been solid in recent years," said Loos.
"In addition, smaller cities such as Bloemfontein, while not having the same economic growth as some larger metros, didn't appear to create the same oversupplies as others during the boom years, having had what appeared to be more moderate building booms. So, holiday-driven regions aside, the minor provincial regions appear okay."
