Just how healthy is the residential property market? Well, according
to FNB's property barometer, the market is still very, very buoyant.
Just how healthy is the residential property market. Looking through
some of the property papers in Gauteng and Cape Town last week, sellers
are still being pretty demanding in what they are asking for.
But certainly fewer are getting their asking prices. 60 percent in
fact are not achieving their asking prices. FNB does a property barometer,
in which it assesses the opinions of professionals in the property market.
Ed Grondel is the chief executive of FNB Home Loans, and he joins us
on the line now. Ed who exactly is surveyed in this particular research?
Good evening Bruce, yes as you said, it is 150 property professionals
or so, real agents and principals of big name brands around the country.
Now there are many more agents of course, there is something like 20
000 agents around the country, and we make certain that the sample we
use with every quarters researched is a different sample, but always
well experienced, big name brand people. People who really understand
the market, so we dont have honest Eds Real Estate
We trust honest Ed everyday. But having looked specifically at Gauteng
and the Western Cape, Bedfordview, the best performer between the first
quarter of 2005 and 2006 up 57 percent. In the Western Cape, Oakglen
up 40 percent. Certainly very strong growth in some areas of the property
Bruce, yes, but I would not look at individual suburbs because they
could be skewed by low volume, one unit, etc. A more important factor
for me there is we produce a list of various suburbs and their price
increase. We do the highest, we do the lowest etc.
Now, what is more interesting for me, is on a page of say ten suburbs,
where we show the growth ranging from say, 50 down to 20 percent or
whatever it is, what is more interesting for me is comparing that to
a year or two years ago where that figure was standing at a high of
70 or 75 percent growth, and the lower one on that list was standing
at 40 percent.
So there has been a definite shift in the growth overall, and I am
not referring to the same suburbs every time, but I talk about a list
of suburbs in each of the areas. So there is most definitely still growth
in the property market, but we have definitely seen a shift down, and
as you mentioned, 60 percent of sellers not getting their price. That
has turned around from some 29 percent eighteen months ago.
And also, properties on average are on the market for eight weeks, which
is quite a long time.
Yes, but it has been like that for a little while and it might indicate
that that is exactly the sort of level it should be. It takes a while
to settle in. We have passed the time when buyers were going out and
saying I have got to get a property at all costs before we run out of
stock kind of thing. There is more choice in the market now, and I think
developers have caught up. So I think a period of two months, really
if you think about it, is not a long time and we have seen the same
trend happen for the last three quarters or so. So I think we have got
a fairly normalised market where that is concerned.
We are running out of a stock in time, but what is nice about this particular
research is that it is forward looking and provides an opportunity for
forecasting. What is it looking like for the twelve months hence?
Indeed, and the real estate professionals who proved over time to be
absolutely accurate, they are not trying to talk the market up. We have
watched their trends go up and down and every time they have been right
on the coconut. And this time they say, expect the next quarter to be
quite buoyant, so lets hope they are right again this time.
Ed Grondel thank you very much indeed. He is the chief executive officer
of FNB Home Loans. The FNB property barometer showing the property market
in South Africa still very, very buoyant.