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Pretoria - About 82 percent of residential properties are now being
sold for less than the asking price compared with about 30 percent in
the first quarter of 2005 while a home remains on the market for an
average of 11 weeks before it is sold.
Jan Kleynhans, the chief executive of FNB Home Loans, said yesterday
that houses in the top end of the market remained on the market for
an average of 14 to 16 weeks while it took about eight weeks to sell
a home at the lower end of the market.
Kleynhans said although activity levels in the residential property
market were stable, FNB's residential property barometer revealed the
rate of change in activity levels declined by 15 percent in the fourth
quarter of last year compared with a year earlier.
However, Kleynhans said this decline was "not as bad as expected"
in the light of negative influences on the market and pressures on consumers.
He attributed the decline in activity levels to rising interest rates,
inflationary pressures and the National Credit Act.
The barometer also revealed that the proportion of properties bought
to let was at an all-time low at about 10 percent while the proportion
of first time buyers was also relatively low at 17 percent.
The barometer is based on the perceptions of estate agents of market
activity levels.
John Loos, an FNB Home Loans property strategist, said a snap survey
done last month showed a significant rise in activity levels. Although
this was largely due to seasonal factors, underlying market conditions
remained weak.
Loos does not believe the market has reached the bottom of the cycle
yet but expects the demand for residential property to gradually improve
from the second quarter.
This is based on FNB's expectation that interest rates will move sideways
from now until late in the year, when the Reserve Bank may cut rates.
Loos said affordability pressures were strongly reflected in the survey
about the reasons for selling a house.
As a percentage of total sales, 21 percent of homeowners were selling
because they were downscaling due to financial pressure; 17 percent
were downscaling in line with their life stage; 9 percent were emigrating;
9 percent were relocating within South Africa; 18 percent were upgrading;
12 percent were moving for safety or security reasons; 8 percent were
selling because of changes in the family structure such as a death,
divorce or marriage; and 6 percent were moving to be closer to work
or amenities.
Loos said there would be a turnaround in the future in people selling
for safety or security reasons and moving closer to work or amenities,
as traffic congestion worsened
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Newsletter:
3 February 2012 to 10 February 2012 - Krugersdorp, Gauteng, South Africa
