(Bloomberg) -- The most expensive band of South Africa's residential housing market contracted for six straight quarters, the longest run since at least 2010, as the cheapest band rose the most on record in the second quarter, according to data published by First National Bank Ltd.
The highest segment saw prices fall by 6.4% percent in the second quarter, while in the cheapest band prices rose by 7.6%.
“In the lower end, there is a shortage of supply of new property, at appropriate locations and price points, said Siphamandla Mkhwanazi, an economist at FNB. “Demand is also supported by higher income households, participating in buy-to let market, while the upper end is excessively supplied.”
Data from FNB separates the South African housing market into five bands, based on price, with the most expensive band including houses over 9.2 million rand ($644,375) and the lowest band including houses between 492,000 rand and 1.2 million rand.
The highest priced segment once posted double digit growth rates and has not grown since the first quarter of last year. First National Bank expects a further contraction this year in the upper end as low interest rates persist, although they expect record growth for homes in the cheapest band.
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