More than 5 months to sell a home - new survey

Sellers take much longer to offload properties, take bigger discounts, but estate agents are feeling more positive - barometer in a nutshell.

Not so long ago, properties were being snapped up within weeks and even days of being advertised to the market. But these days, it is taking an average of more than five months to sell residential real estate.

This was one of the trends to emerge in the latest FNB Property Barometer, a survey that gauges sentiment and other factors among estate agents.

Issues highlighted when the survey results were released in Johannesburg on Monday include that:

  • Fewer people are receiving asking price from buyers, with the number of sellers accepting discounts increasing from 85% to 88%, when comparing the second and third quarters of the year;
  • It took an average of 14 weeks and six days to sell property, reported estate agents in the second quarter; now, though, the average selling time is 20 weeks and one day;
  • There were fewer residential investors (12%) buying properties last quarter compared to the second quarter (14%);
  • One in five sellers cite emigration as the reason for offloading their properties - a figure that has been rising this year;
  • One in four sellers cite financial constraints as the reason for putting their homes on the market - also a higher figure than the previous quarter;
  • There's an increase in the number of investment properties that are being returned to the market without making a profit for their owners - and even a loss; and
  • Downscaling because of financial pressures appears to be more marked in KwaZulu-Natal and the Western Cape than Gauteng.

Although this has been a tough year for estate agents, and most were decidedly glum about business prospects in the second quarter, sentiment has shown a marked improvement.

According to FNB, 15% of agents surveyed in the previous quarter expected things to improve but 48% are now more positive.

FNB Home Loans' property strategist John Loos said it is possibly the August SA Reserve Bank decision to leave interest rates on hold that added a boost to sentiment in this latest survey.

Unrealistic price setting by sellers was contributing to the increased time on the market, surmised FNB, while the disappearance of buy-to-let investors was attributed to the low yields on offer.

There are also fewer first-time buyers (down from 17% to 12%), a sign that affordability has helped put a lid on sales volumes and prices.

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